What I Want for Christmas is...

By Professor Katherine Pratt

This op-ed was originally published in the Dec. 24, 2009 edition of the Los Angeles Daily Journal. It is republished annually in keeping with season's spirit of giving

Nothing. Well, not exactly nothing--just nothing for me. What I really want for Christmas is for more holiday gift-givers to honor their family, friends and business contacts by making charitable contributions on their behalf instead of buying them material gifts. Members of my family recently exchanged the names of our favorite charities and agreed to make charitable contributions this year, in lieu of our usual Christmas gifts. Now I have started to think about how this could happen on a much larger scale.

Societal norms currently favor material gifts over charitable contributions to honor someone. A gift-giver often has no way of knowing whether friends, family, and business contacts would prefer a material gift or a charitable gift in their honor. Also, a gift-giver might be concerned about appearing cheap and selfish if she substitutes a tax deductible donation for a non-deductible material gift. When in doubt, gift-givers make the "safe" gift choice and give material presents. On the gift recipient's side, there typically is no easy, socially acceptable way of communicating to gift-givers a preference for a charitable contribution. This is especially true with respect to gifts for business associates, clients and professionals such as doctors.

What I Want for Christmas is...

By Professor Katherine Pratt

This op-ed was originally published in the Dec. 24, 2009 edition of the Los Angeles Daily Journal. It was republished in recognition of Giving Tuesday.

Nothing. Well, not exactly nothing--just nothing for me. What I really want for Christmas is for more holiday gift-givers to honor their family, friends and business contacts by making charitable contributions on their behalf instead of buying them material gifts. Members of my family recently exchanged the names of our favorite charities and agreed to make charitable contributions this year, in lieu of our usual Christmas gifts. Now I have started to think about how this could happen on a much larger scale.

Societal norms currently favor material gifts over charitable contributions to honor someone. A gift-giver often has no way of knowing whether friends, family, and business contacts would prefer a material gift or a charitable gift in their honor. Also, a gift-giver might be concerned about appearing cheap and selfish if she substitutes a tax deductible donation for a non-deductible material gift. When in doubt, gift-givers make the "safe" gift choice and give material presents. On the gift recipient's side, there typically is no easy, socially acceptable way of communicating to gift-givers a preference for a charitable contribution. This is especially true with respect to gifts for business associates, clients and professionals such as doctors.

The solution to these obstacles is an online charitable donation gift registry on which individuals and businesses could express their desire for donations to their preferred charities, in lieu of material gifts, by registering on the website. The registry would maintain a searchable list of the parties who have registered, with their preferred charities, and a list of charities, organized alphabetically by name and subject area and searchable by name or keyword. Gift-givers could search the registry to make donations honoring their friends, family, and business contacts. A fitting name for the registry would be the Gifts for Good Registry.

When I asked my colleague, tax exempt organizations expert Ellen Aprill, whether such a registry already exists, she directed me to JustGive.org. JustGive is an online charity that maintains a searchable list of 1.5 million charities and allows a person to create a Charity Registry. The Charity Registry functions like my imagined Gifts for Good Registry, but lacks some features I envisioned, such as an e-card acknowledgement, to notify the honoree of the donation and allow for an online thank-you, and an option to buy stickers for holiday cards or a tasteful placard for display in a business office, announcing registration on the site. Also, JustGive charges a fee for each donation from the Charity Registry.

Prof. Katie Pratt discusses tax consequences of sex-reassignment surgery

Professor Katie Pratt discussed the tax consequences of sex-reassignment surgery at the Loyola of Los Angeles Law Review symposium, "LGBT Identity & the Law."

Three Loyola professors on SSRN top 25 list

Loyola Law School Professors Ted Seto, Katie Pratt and Jen Kowal are among the top 25 U.S. tax professors as ranked by downloads on the Social Science Research Network.

In 2011, those serious about reducing the deficit will look to tax expenditures

By Professor Katherine Pratt

This is the year in which the president and the Congress should focus on reducing inefficient and out-of-control spending through the tax code, to reduce federal budget deficits without gutting worthwhile discretionary spending programs.

President Barack Obama deserves credit for speaking frankly in his recent State of the Union address about the critical need to cut "spending" in all parts of the federal budget, not just in the non-defense discretionary spending that makes up a relatively small part of the federal budget. Obama also deserves credit for suggesting that we eliminate tax "loopholes" - also known as "tax expenditures" (targeted tax subsidies that benefit a narrow group of taxpayers, reduce tax revenue and drive up tax rates for other taxpayers). However, the president missed an opportunity to call for reform of many of the loopholes in the individual income tax, to make the tax system more efficient and fair, and to contain the rapid growth of tax expenditures, currently estimated to total over $1 trillion a year.

Tax expenditures frequently are the economic equivalent of a federal spending program. Generally, in an income tax system, legitimate business expenses (e.g., the cost of renting an office) are deductible, but personal living expenses (e.g. the cost of renting an apartment) are not deductible. Our tax code provides generally that personal expenses are not deductible, but allows individual taxpayers to take certain types of itemized deductions (e.g., the home mortgage interest deduction) if the taxpayer's total itemized deductions exceed the "standard deduction" ($11,600 for married couples and $5,800 for individuals in 2011). The itemized deductions allowed by the tax code thus generally are the functional equivalent of a loophole-free income tax code plus a federal spending program. For example, the home mortgage interest deduction is a federal housing subsidy that disproportionately benefits upper-income homeowners. Our tax code also provides tax subsidies in the form of "exclusions," meaning that the excluded item is not treated as income and is not taxed. An example is the income tax exclusion for employer-sponsored health insurance ("ESI"), which drives up the cost of healthcare and disproportionately benefits taxpayers whose employers provide "Cadillac" health insurance.

Tax reform event live streaming on web today

Loyola Law School, Los Angeles is hosting "Starving the Hidden Beast: New Approaches to Tax Expenditure Reform" today in partnership with the Urban-Brookings Tax Policy Center. Video from the daylong event is:

David Gamage, University of California, Berkeley School of Law: "Tax Salience and Tax Expenditures"

COMMENTATOR: Damon Jones, Harris School of Public Policy, University of Chicago

10-11:30 a.m.: Reforming the Tax Expenditure Budget Presentation

MODERATOR: Sarah Lawsky, University of California, Irvine School of Law

PANELISTS:

Linda Sugin, Fordham Law School: "Tax Expenditures, Reform, and Distributive Justice"

Eric Toder and Donald Marron, Urban-Brookings Tax Policy Center: "Tax Expenditures and the Size of Government"

COMMENTATOR: Daniel Shaviro, New York University School of Law

11:30 a.m.: Lunch

12:45-2:15 p.m.: Evaluating Tax Expenditures

MODERATOR: Rosanne Altshuler, Rutgers University

PANELISTS:

Theodore Seto, Loyola Law School, Los Angeles: "Reframing the Tax Expenditure Budget"

Thomas Hungerford, Congressional Research Service: "Tax Expenditures"

COMMENTATOR: Edward Kleinbard, USC Gould School of Law

2:30-4 p.m.: Approaches to Tax Expenditure Reform

MODERATOR: Katherine Pratt, Loyola Law School, Los Angeles

PANELISTS:

Marvin Phaup, Federal Budget Reform Initiative, Pew Economic Policy Group: "Integrating Tax Expenditures with the Budget Process"

Diane Lim Rogers, Chief Economist, Concord Coalition: "Tax Formed in the Proposal of the Deficit-Reduction Commissions"

COMMENTATOR: Elizabeth Garrett, USC Gould School of Law

4:00 p.m.: Reception

Show Me the Money: A Hidden Source of Funding for Federal Deficit Reduction

By Professor Katie Pratt

This op-ed was originally published in the Jan. 12, 2011 edition of the Los Angeles Daily Journal.

If President Barack Obama and Congress ever decide to get serious about

federal deficit reduction, there is a potential $1 trillion deficit reduction funding source that they have ignored. With annual federal budget deficits projected to average $1 trillion for the next decade, they should seriously consider this funding source, instead of assuming - contrary to fact - that radical cuts in federal discretionary spending programs can painlessly and equitably achieve meaningful deficit reduction.

Last week, the new Speaker of the House, John Boehner, citing the "Pledge to America," committed to cut federal spending, reduce federal budget deficits, cut federal taxes and shrink the size of the federal government. Democrats also have acknowledged the serious threat posed by projected

federal budget deficits, and Obama has proposed a freeze on discretionary spending programs. Freezing discretionary spending or cutting wasteful discretionary spending will not achieve meaningful deficit reduction, however, because the total funding for non-defense domestic discretionary spending programs adds up to only about one-sixth of the federal "spending" budget; defense and homeland-security spending, interest on the federal debt and entitlement-benefit spending account for most federal outlays.

Boehner and other prominent Republicans do not acknowledge any connection between tax cuts and federal budget deficits, despite the fact that federal revenue fell during the Bush administration to the lowest levels since the 1950s, and that revenue loss has been a major contributor to federal budget deficits. Instead, they frame tax cuts as "pro-growth" measures and budget deficits as the result of the federal government spending too much money on wasteful and inefficient programs. Many voters also erroneously assume that spending cuts can be achieved painlessly by cutting wasteful, inefficient or overly generous programs.

What I want for Christmas is...

By Professor Katie Pratt

This op-ed was originally published in the Dec. 24, 2009 edition of the Los Angeles Daily Journal.

Nothing. Well, not exactly nothing--just nothing for me. What I really want for Christmas is for more holiday gift-givers to honor their family, friends and business contacts by making charitable contributions on their behalf instead of buying them material gifts. Members of my family recently exchanged the names of our favorite charities and agreed to make charitable contributions this year, in lieu of our usual Christmas gifts. Now I have started to think about how this could happen on a much larger scale.

Societal norms currently favor material gifts over charitable contributions to honor someone. A gift-giver often has no way of knowing whether friends, family, and business contacts would prefer a material gift or a charitable gift in their honor. Also, a gift-giver might be concerned about appearing cheap and selfish if she substitutes a tax deductible donation for a non-deductible material gift. When in doubt, gift-givers make the "safe" gift choice and give material presents. On the gift recipient's side, there typically is no easy, socially acceptable way of communicating to gift-givers a preference for a charitable contribution. This is especially true with respect to gifts for business associates, clients and professionals such as doctors.

The solution to these obstacles is an online charitable donation gift registry on which individuals and businesses could express their desire for donations to their preferred charities, in lieu of material gifts, by registering on the website. The registry would maintain a searchable list of the parties who have registered, with their preferred charities, and a list of charities, organized alphabetically by name and subject area and searchable by name or keyword. Gift-givers could search the registry to make donations honoring their friends, family, and business contacts. A fitting name for the registry would be the Gifts for Good Registry.

When I asked my colleague, tax exempt organizations expert Ellen Aprill, whether such a registry already exists, she directed me to JustGive.org. JustGive is an online charity that maintains a searchable list of 1.5 million charities and allows a person to create a Charity Registry. The Charity Registry functions like my imagined Gifts for Good Registry, but lacks some features I envisioned, such as an e-card acknowledgement, to notify the honoree of the donation and allow for an online thank-you, and an option to