Taxing Income Where Value is Created: draft and powerpoint

I have posted a draft of a work in progress, Taxing Income Where Value is Created, which is co-authored by Laurens van Apeldoorn (Leiden University). Here is the abstract:

Subscribing to the core idea that income should be taxed where value is created, the international community has devised a set of tax base protecting rules to counter a world in which highly profitable multinational companies like Apple, Google, and Amazon pay very little in taxation. But these rules rely on assumptions about value that tend to allocate most revenues from international trade and commerce to rich countries while, whether intentionally or not, depriving poorer countries of their proper share. This article argues that a rigorous examination of what we mean by value would prompt changes in this allocation. To demonstrate with a concrete example, the article examines wages paid to workers in low income countries and reveals a clear and well-documented gap between market price and fair market value resulting from labor exploitation. It then demonstrates how to apply this knowledge to existing international tax rule sets to reallocate profits to align more closely to the value-based ideal. If accepted in principle, the proposed approach could be expanded beyond wages to consider other areas in which prices do not align with value creation. Ultimately this could provide a more detailed template to reallocate multinational revenues in a way that does not inappropriately benefit richer countries at the expense of poorer ones.

My powerpoint presentation of the paper is available in PPT here and in PDF here. I have used various versions of this powerpoint in presenting this paper a couple of times now, with (hopefully) some improvements in each presentation.

As depicted in one of my slides, I have encountered a perplexing mix of reactions to the ideas presented in this paper. Feedback ranges from "will make administration and compliance impossible for tax authorities and taxpayers alike" to "won't change anything, profit shifters gonna profit shift" to "great idea; doesn't go far enough." I wonder if a competent authority faced with a price adjusted per our proposal would see it as a position reasonable and consistent with the ALTP as we do, and whether it actually matters to the competent authority whether it is reasonable or consistent or not (I will admit that I am skeptical that competent authorities work out disputes among themselves on the merits: see this paper for why).

This is still a work in progress and comments are welcome.

For female law students: 5 warning signs your important interview with that law firm won't yield you a job offer

[Update: I understand that some find this post to be (1) making a causal claim that is (2) sexist or misses sexism as a main causal factor of an unsuccessful job interview. I can see that I used the word "reasons" in the title, and that isn't right. As the blog post makes clear, I offered these as warning signs, not reasons: as I say below, "I have no way to know any more than they did who got the job or why they didn't get the job." The idea of this post is to explore some of the flags that might indicate an interview is not going as well as it seems on the surface. The reasons for which the interview might not be going well are many, and among them are pernicious behaviours and expectations. I revised the title to better reflect the content of the blog post but have not revised the text of the post below.]

I hear from law students all the time that an interview they thought went very very well didn't land them the job. A lot of the time (not always) these are female students. A lot of the time (not always) they were perfectly qualified and very capable. A lot of the time (not always) I think they probably would have done very well in a law firm job. I have no way to know any more than they did who got the job or why they didn't get the job.

However, I can identify some warning signs from my own experiences (not all horrible) and through countless conversations with my students over the years. In the hopes that this will help someone in some future interview, I offer five signs things didn't go as well as you thought they did:

1) You were wearing something uncomfortable. Believe me, it showed. If something is itchy or your feet hurt or whatever, if you thought for even one nanosecond about anything you were wearing, the interview was over that moment. Doubly over if you happened to inspect any part of yourself at any time. You were distracted, and your distress was noticeable. You did not go to this interview to impress someone with your impeccable taste in fashion. Be professional yes but be comfortable and laser focused at all times on why you are there.

2) The interviewer at any time looked at any piece of paper or a phone or iPad or anything but you. Clearly whatever was on the paper or the screen was more more important than you. You were supposed to be the star of this show, and you didn't command the full attention of your audience. Why is that? Are you waiting for the interviewer to ask you a good question, hopefully one that you meticulously prepared to answer? Why are you waiting for that? Your job in the interview is to actively engage the interviewer. Not the other way around.

3) There was more than one interviewer, and at some point they looked at or talked to one another instead of you. These interviewers are tired and they sat through a lot of interviewees today, making constant, mostly negative, judgments and decisions about a lot of people they don't know. They are looking for a way to take a mental pause during your interview. When you got lulled into that energy, you gave them the excuse; this is not a serious candidate, so we are on break now. If you don't wake them up, get them sitting straight in their chairs and laser focused on you, you will not get the job.

4) The interview mainly focused on your hobbies/other interests/places you've traveled; the firm's pro bono work; or its strong commitment to work-life balance. This is a job interview. You are being inspected for signs that you might not be 100% committed to living out your full life within the four walls of your office, serving the firm's paying clients with selfless dedication. You don't have any hobbies that don't involve reading the business section of the newspaper. (Note: take the hobbies or outside interests etc section off your resume and if anyone asks you what your hobbies are, they are: reading the business section of the newspaper, e.g., to see what new deals are unfolding. And then steer the conversation back to the job).

5) A day or a week after the interview, the thing you recollect the most is that the interview seemed pleasant and easy, and everyone was nice. You got a few minutes to make an impression that you are serious, capable, and a boss, and instead, you spent your time trying to be pleasant and unobtrusive. Stop trying to make people like you: you need to think about what you are doing that makes people not take you seriously. Is it your passive or deferential behaviour? Why do you think any law firm would want to hire a lawyer with those characteristics? They don't want to. So stop it.

You can commit a lot of perception errors in an interview. These are only five of the ones I note on an annual basis. If you notice them happening, realizing you are in a hole could be the first step to changing the conversation.