Steven Rosenthal

Senior Fellow, Urban Institute. Rosenthal researches, speaks, and writes on a range of Federal income tax issues, with a particular focus on business taxes. He practiced tax law in Washington, D.C. for over 25 years, most recently as a partner at Ropes and Gray. Rosenthal also was a Legislation Counsel with the Joint Committee on Taxation, where he helped draft tax rules for financial institutions, financial products, capital gains, and related areas. He is the former Chair of the Taxation Section of the District of Columbia Bar Association. Rosenthal holds an AB and JD from the University of California at Berkeley and an MPP from Harvard University.

Treasury Pulls its Punches on Earnings Stripping

By :: November 20th, 2015

Treasury released its much anticipated second round of guidance on inversions, which failed to live up to expectations.  Treasury made only small technical changes to the definition of an inversion.  News reports suggested something much larger—namely limits on earnings stripping, which would have made inversions (and other combinations of U.S. firms with foreign corporations) much […]

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The Bipartisan Budget Deal’s Small Step to Crack Down on Large Partnerships

By :: October 28th, 2015

The budget agreement reached this week by outgoing House Speaker John Boehner and President Barack Obama takes a small but useful step toward preventing tax avoidance by large partnerships. But it doesn’t go far enough and misses a much simpler solution—giving the IRS more resources to enforce current law. Last year, the Government Accountability Office […]

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Making Wall Street Pay: Proposals from the Campaign Trail

By :: October 8th, 2015

Both Bernie Sanders and Hillary Clinton recently proposed new Wall Street taxes, which reflect their strikingly different philosophies (and, perhaps, their different personalities).   Bernie’s proposal is bold—he squeezes Wall Street to fund programs for our country’s future.  Hilary’s proposal is targeted—she tackles a specific problem precisely. Bernie goes big:  he introduced legislation that included a “speculation […]

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The Rich get Richer, with a Little Tax Help

By :: June 22nd, 2015

Renaissance Technologies, an investment manager, is once again showing how to aggressively manipulate the tax system for its own benefit.  This time, Renaissance is helping its owners/employees (who are some of the wealthiest individuals in the country) to shelter tens of millions of dollars in tax-free Roth IRAs. Renaissance manages money for its employees, former […]

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Is Obama Closing Retirement Savings Loopholes or Just Curbing Congress’ Generosity?

By :: January 28th, 2015

In his upcoming budget, President Obama will propose to strip away the “loopholes” that permit wealthy individuals to accumulate large amounts in tax-favored retirement plans. He would prohibit a taxpayer from contributing any more to IRAs or other qualified retirement plans once his or her accounts reach a combined value of $3.4 million. For sure, […]

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Can Obama slow corporate inversions? Yes he can.

By :: August 15th, 2014

Politicians can debate whether corporate tax inversions are “unpatriotic” or simply a legitimate technique to reduce taxes–and commentators can argue over whether anything should be done to stop them. Experts also disagree about whether President Obama and his Treasury Secretary have the legal authority to write new rules to discourage inversions. In my view, on this last […]

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Abuse of financial products by hedge funds

By :: July 22nd, 2014

Today, I testified before the U.S. Senate Permanent Subcommittee on Investigations (the “Subcommittee”) on the abuse of structured financial products by hedge funds, in particular by the Renaissance funds. This is what I told the Subcommittee: Almost a century ago, Congress reduced the tax rate for long-term capital gains. Then, long-term meant holding assets for […]

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A Flash Tax for the Flash Boys

By :: April 18th, 2014

Michael Lewis spotlights high-frequency traders with his new book, Flash Boys.  These traders use high-speed computers and fast connections to outrace investors, and other traders, to the market.  They now account for more than half of all U.S. stock trades.  And the flash boys spend billions to save milliseconds (by, for example, laying expensive fiber-optic […]

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You Could Owe Capital Gains Taxes When You Spend Bitcoin

By :: March 27th, 2014

The IRS determined this week that Bitcoin and other digital currencies should be taxed as property, not currency. This means Bitcoin transactions will be taxed as capital gains, not as ordinary income. But, perhaps surprisingly, the act of spending Bitcoin could trigger capital gains taxes. Thus, the use of virtual currencies as a medium of […]

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Camp Defines Private Equity as a Business, Would Boost Taxes on Carried Interest

By :: February 27th, 2014

In the tax reform roadmap he released yesterday, House Ways & Means Committee Chair Dave Camp (R-MI) targeted the trillion dollar private equity industry.  Not only did he propose to tax the compensation of private equity managers at ordinary rates rather than lower capital gains rates, he also called the industry out. The official description […]

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