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The California Supreme Court’s decision to block a ballot measure that would have made it harder for the state legislature to raise taxes shines a spotlight on an overlooked aspect of tax policy: the balance between transparency and practicality. The controversy surrounding the initiative underscores a broader debate about the role of direct voter participation in tax policy decisions.

Transparency and direct democracy are the guiding lights of the political system, but too much public participation can be more of a hindrance than a productive one. The California court found that the measure would hinder the legislature’s ability to meet its fiscal responsibilities and respond to emergencies. One can imagine the downside when the state faces an urgent problem and must mobilize resources to put a tax increase to a referendum.

The court also concluded that the revision would significantly alter the basic structures of government and exceed the power of citizen initiatives to amend the state constitution. California’s restrictions on citizen initiatives are designed to limit the extent to which government can be changed by popular vote alone.

Few voters support tax increases, but many support the services that tax increases provide. A certain degree of opacity in the collection and distribution of tax revenue can be beneficial. It allows politicians, who should be better informed and equipped, to make fiscal decisions without the pressure of populist sentiments at play in every decision.

The California case illustrates how difficult it is to maintain a functioning government while adhering to democratic principles. Many would vote to raise money to repave their street, but few would vote to raise money for services that seemingly have nothing to do with them—the court’s decision reflects that notion.

The Stock Exchange – This is where great ideas about taxes and accounting come together.

—Andrew Leahey

Search for Leahey’s Split to Bloomberg Tax and follow him on Mastodon at @[email protected]

Chevron-End of Homage

Hogan Lovell’s Danielle Stamp And Sean Marotta share the top five things companies should do following the Supreme Court’s decision to overturn the Chevron mandate. Number one – don’t panic.

Moore vs. the United States

Crowell’s Carina Federico, Eric HomsiAnd Christine Lane analyze the Supreme Court ruling in Moore to maintain the mandatory repatriation tax, noting that the decision does not exclude constitutional challenges to the wealth tax.

RSMs Don Sweetwine writes that the wording of the decision suggests that future congressional action is possible.

Chamberlain’s Farid Khosravi and Akerman’s Jennifer Lindy believe that the assumption that the ruling makes a wealth tax unnecessary may be premature.

Net operating losses

Greenberg Traurig’s Shail Shah examines California’s budget proposal and how the measure suspends the tax deduction for net operating losses.

BakeryHostetler’s Michael Semes analyzes Pennsylvania’s net operating loss proposal and says it reflects bipartisan support and the state’s budget surplus.

Public tax reporting in the EU

Loyens & Loeff’s Jacoline Kleijn And Maurice van Klaveren to review the EU rules on public country-by-country reporting and to point out that public reaction to the data could influence the transfer pricing policies of multinational companies.

Exacteras Mimi song examines the EU’s public country-by-country reporting rules and calls on companies to review their transfer pricing and prepare to explain their financial data to the public.

Work culture

Davis Wright, Tremaine’s senior DEI officer Yusuf Zakir defends his profession and says attacks on DEI should not undermine an inclusive workplace.

AltaClaros Patricia Libby shares critical thinking strategies for law firm employees, saying that comprehensive guidance, data-driven feedback, and experience-based training can help.

Columnist Corner

States should increase sales tax collection from large corporations and use the revenue generated to finance services that help small businesses comply with their tax regulations. Andrew Leahey writes in his latest column “Technically Speaking.”

A proactive approach with targeted audits, higher penalties for violations and additional state and local tax revenues would create “a virtuous cycle of a business-friendly environment and increased tax revenues,” Andrew says.

Career steps

Samuel Lyon And Robert Reeves were promoted to tax partner or auditor at Dannible & McKee.

Amanda Albert has joined WilmerHale’s tax practice as a partner.

Phyllis Guillory Womble Bond has joined Dickinson as a partner in the corporate and securities group in Houston.

Anita Siegel And Randi Siegel Less have joined Bressler, Amery & Ross, PC as managing directors of the Trust and Estates Practice in the Florham Park, NJ office.

Steven Matays has joined Freshfields’ tax practice in New York.

If you change jobs or get promoted, please email your suggestion to [email protected] so we can consider it.

News overview

It’s been another busy week for tax news from state capitals to Washington. Here are some stories you may have missed from our Bloomberg Tax News team.

Supreme Court overturns Chevron regulation, limiting the power of the authorities

The divided U.S. Supreme Court has thrown out a decades-old legal doctrine that allowed federal regulators to interpret ambiguous laws, issuing a landmark ruling that will limit the work of environmental, consumer and financial regulators. Read more

PepsiCo wins appeal in dispute over Australian royalty tax

PepsiCo Inc. has appealed an Australian lawsuit over whether the company must pay a withholding tax on royalties designed to prevent offshore transactions that multinational companies use to avoid taxes. Read more

EY’s next Global CEO wants to unite the company with a new vision

Ernst & Young’s new global boss wants to unite the fragmented Big Four and overcome the divisions created by the failed breakup plan with the help of an AI-powered business strategy. Read more

G-20 plan requires billionaires to pay two percent of their wealth in taxes

A new proposal from the G20 would require billionaires to pay two percent of their wealth in taxes each year – an idea that could bring governments up to $250 billion annually. Read more

Tax journals

International Journal of Taxation

Companies must carefully plan overseas assignments from before departure to afterward to ensure comprehensive tax and legal compliance, explains Andersen Globals Anshu Khanna says.

Poul Erik Lytken And Maria Vaupel Andersen The law firm Accura provides an update on the new draft law regarding a levy for digital streaming services in Denmark.

Tax Management Memorandum

Despite the claims of its proponents, wealth taxation does not bring desirable economic effects for society, says economist Lawrence J. McQuillan of the Center on Entrepreneurial Innovation at the Independent Institute.

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