Study Question Set #4 for Perfectly Legal

1. What is a "corporate inversion"?

2. What reason did Republican lawmakers offer for why so many American companies were creating off-shore subsidiaries?

3. What reason did Lloyd Doggett (D-Texas) provide for Democrats needed to close off-shore loopholes?

4. What did Martin Sullivan of Tax Notes discover about the rate of increase in tax-haven profits vs. the profits placed in countries that were not tax havens?

5. What is a Limited Liability Partnership and how are they implicated in the widespread abuse of corporate tax devices?

6. Why does Johnston suggest that government regulation is not the solution to the moral hazard that LLPs present?

7. What is an Exchange Fund and how does it work?

8. What are opinion letters and how do they influence buyers of tax shelters?

9. How do traditional defined-benefit pension plans differ from modern retirement plans?

10. What are 2 ways that 401(k) plans benefit the companies that use them as retirement plans for their employees?

11. Extra Credit. Why does Johnston say that the flat tax as envisioned by Hall and Rabushka wouldn't necessarily simplify the tax code?

12. Extra Credit. What, in your opinion, is the most attractive idea for tax reform that Johnston suggests in "Conclusions"? Why?