Billionaire Taxes

U.S. Senator Elizabeth Warren recently proposed an ultra-high-net worth tax that would raise hundreds of billions of dollars in revenue per year while taking no money from 99.9 percent of U.S. households.  Warren would annually tax household fortunes above $50 million at 2 percent of their value, and fortunes above $1 billion at 3 percent.  In the U.S., 99.5 percent of households have a net worth below $16.5 million, according to the Survey of Consumer Finance.  Even highly successful, hard-working, and well-educated people are extremely unlikely to pay a dime because of this proposed tax.

You do not have to … Read more

Measuring Regulation Based on Industry Response

Despite the central role of government regulation in academic inquiry and policy evaluation, there is no universally accepted way to measure how changes in regulatory complexity and intensity affect private industry at different times.  This lack of a standard methodological approach to measuring regulatory burdens on companies has limited the extent to which researchers can generalize and compare results of studies that consider particular regulations, industries, or time periods.  There is a strong need for a standard approach that is theoretically and empirically grounded and difficult to manipulate.

In Measuring Regulation, Miao Ben Zhang and I develop a novel … Read more

A New Take on Solvency and Adequate Capitalization in Bankruptcy

Valuation, solvency, and adequate capitalization analyses play a crucial role in the process of reorganizing U.S. companies in bankruptcy.  They are central to allowance of claims, adequate protection, avoidance actions such as fraudulent transfer and preference, rejection of collective bargaining agreements, plan confirmation, and 363 sales.  Solvency opinions may also be sought prospectively in anticipation of transactions such as leveraged buyouts, spin-offs, or dividend recapitalizations.

Courts and bankruptcy professionals have often complained about the expense, delay, subjectivity, and unpredictability inherent in traditional approaches to valuation.  Financial analyses can consume tens of millions … Read more