Brian Galle
@bdgesq.bsky.social
Berkeley law prof guy, erstwhile Georgetown, DOJ, & points in between. Mostly boring tax stuff; occasional dollops of nonprofits, law & econ, etc. Could be arguing in my spare time.
I have worked productively with and respect some Tax Foundation staff.
It's unfortunate they are tolerating these ridiculous lies from Jared.
E.g., the CBTA has 2 pages of findings on why it is a one-time tax. You could not strike the 1-time language & be consistent w that purpose.
It's unfortunate they are tolerating these ridiculous lies from Jared.
E.g., the CBTA has 2 pages of findings on why it is a one-time tax. You could not strike the 1-time language & be consistent w that purpose.
January 16, 2026 at 4:16 PM
I have worked productively with and respect some Tax Foundation staff.
It's unfortunate they are tolerating these ridiculous lies from Jared.
E.g., the CBTA has 2 pages of findings on why it is a one-time tax. You could not strike the 1-time language & be consistent w that purpose.
It's unfortunate they are tolerating these ridiculous lies from Jared.
E.g., the CBTA has 2 pages of findings on why it is a one-time tax. You could not strike the 1-time language & be consistent w that purpose.
Therefore, no rational person, and certainly no rational billionaire, is going to pay tax on more of the value of their private company than they own. If the optional default rules produce that result, they'll submit an appraisal instead.
This is clear in the text & claims otherwise are deception.
This is clear in the text & claims otherwise are deception.
January 16, 2026 at 2:20 AM
Therefore, no rational person, and certainly no rational billionaire, is going to pay tax on more of the value of their private company than they own. If the optional default rules produce that result, they'll submit an appraisal instead.
This is clear in the text & claims otherwise are deception.
This is clear in the text & claims otherwise are deception.
Alternately, owners of interests in private companies can use the default valuation rules the CBTA provides. These default rules do presume that a person with disproportionate voting control owns at least that much of a company.
To repeat, however, these are optional default rules!
To repeat, however, these are optional default rules!
January 16, 2026 at 2:18 AM
Alternately, owners of interests in private companies can use the default valuation rules the CBTA provides. These default rules do presume that a person with disproportionate voting control owns at least that much of a company.
To repeat, however, these are optional default rules!
To repeat, however, these are optional default rules!
What the CBTA does is gives owners of privately-held businesses two options for valuing their equity interests.
1. They can submit an appraisal. For assets that have traded or been pledged as a security interest for a loan recently, this should readily reflect market value.
1. They can submit an appraisal. For assets that have traded or been pledged as a security interest for a loan recently, this should readily reflect market value.
January 16, 2026 at 2:16 AM
What the CBTA does is gives owners of privately-held businesses two options for valuing their equity interests.
1. They can submit an appraisal. For assets that have traded or been pledged as a security interest for a loan recently, this should readily reflect market value.
1. They can submit an appraisal. For assets that have traded or been pledged as a security interest for a loan recently, this should readily reflect market value.
Briefly, the misinformation claims wrongly that the CBTA would impose astronomical tax rates because it supposedly taxes billionaires based on their voting control over a company, not the company's value. This is a (deliberately?) confused jumble of several provisions.
January 16, 2026 at 2:15 AM
Briefly, the misinformation claims wrongly that the CBTA would impose astronomical tax rates because it supposedly taxes billionaires based on their voting control over a company, not the company's value. This is a (deliberately?) confused jumble of several provisions.
I'm sure you know the Buchanan & @dorfonlaw.bsky.social work on this, but in case it's been a while I'll mention they have some great discussion of this relationship between formal and informal protections.
January 15, 2026 at 8:52 PM
I'm sure you know the Buchanan & @dorfonlaw.bsky.social work on this, but in case it's been a while I'll mention they have some great discussion of this relationship between formal and informal protections.
We will have more on this soon, but the key point is that the voting-stock rule is just part of the default valuation system that taxpayers *opt into*. Anyone who doesn't like the result of the default valuation can submit an appraisal instead. No one will pay tax on value they don't own.
January 15, 2026 at 4:59 PM
We will have more on this soon, but the key point is that the voting-stock rule is just part of the default valuation system that taxpayers *opt into*. Anyone who doesn't like the result of the default valuation can submit an appraisal instead. No one will pay tax on value they don't own.
Indeed (as long as you are donating publicly traded assets). Also, and probably obviously, this rule also applies to tax loss positions so you should instead sell those and donate the resulting cash.
January 15, 2026 at 1:03 AM
Indeed (as long as you are donating publicly traded assets). Also, and probably obviously, this rule also applies to tax loss positions so you should instead sell those and donate the resulting cash.
Both uncapped SALT deduction and the pick-up credit for state estate taxes were good policies. I'd have to think through whether a credit for state wealth tax makes sense. This would presumably have no chance of passing for the same reasons those don't, so just a messaging q above my pay grade.
January 14, 2026 at 6:38 PM
Both uncapped SALT deduction and the pick-up credit for state estate taxes were good policies. I'd have to think through whether a credit for state wealth tax makes sense. This would presumably have no chance of passing for the same reasons those don't, so just a messaging q above my pay grade.
And there is one justice who thinks that there should be essentially no judicial review of retroactive legislation at all.
Can you guess who it is? I bet you can't.
It's Clarence Thomas.
Can you guess who it is? I bet you can't.
It's Clarence Thomas.
January 10, 2026 at 5:54 PM
And there is one justice who thinks that there should be essentially no judicial review of retroactive legislation at all.
Can you guess who it is? I bet you can't.
It's Clarence Thomas.
Can you guess who it is? I bet you can't.
It's Clarence Thomas.
Both before and after the 1913 Act, all kinds of taxes, ranging from tariffs to income taxes to provisions of OBBBA adopted just this past July, were adopted retroactively to the beginning of the year or even farther back. Courts give very, very deferential review of those provisions.
January 10, 2026 at 5:53 PM
Both before and after the 1913 Act, all kinds of taxes, ranging from tariffs to income taxes to provisions of OBBBA adopted just this past July, were adopted retroactively to the beginning of the year or even farther back. Courts give very, very deferential review of those provisions.
Some lawyers who are trying to drum up billionaire business are saying that the Jan. 1 provision is unconstitutionally retroactive. That is bunk, as we explain.
The 1913 income tax--the biggest tax change in U.S. history--was adopted retroactively, and SCOTUS expressly upheld that provision.
The 1913 income tax--the biggest tax change in U.S. history--was adopted retroactively, and SCOTUS expressly upheld that provision.
January 10, 2026 at 5:52 PM
Some lawyers who are trying to drum up billionaire business are saying that the Jan. 1 provision is unconstitutionally retroactive. That is bunk, as we explain.
The 1913 income tax--the biggest tax change in U.S. history--was adopted retroactively, and SCOTUS expressly upheld that provision.
The 1913 income tax--the biggest tax change in U.S. history--was adopted retroactively, and SCOTUS expressly upheld that provision.
For example, several stories report that a few billionaires (of the likely 250+ in CA today) are "making plans to" shift some business out of California or try to establish residency elsewhere. That will not avail them, as the bill will tax anyone resident in California as of January 1, 2026.
January 10, 2026 at 5:51 PM
For example, several stories report that a few billionaires (of the likely 250+ in CA today) are "making plans to" shift some business out of California or try to establish residency elsewhere. That will not avail them, as the bill will tax anyone resident in California as of January 1, 2026.
January 9, 2026 at 10:22 PM
Yeah, that's generally the rule. See supreme.justia.com/cases/federa...
You can think of it as similar to punitive damages in that the point is to deter state actors from violating the Constitution (assuming you think they internalize harms to their budget), not to make the right plaintiff whole.
You can think of it as similar to punitive damages in that the point is to deter state actors from violating the Constitution (assuming you think they internalize harms to their budget), not to make the right plaintiff whole.
McKesson Corp. v. Div. of AB & T, 496 U.S. 18 (1990)
McKesson Corp. v. Div. of AB & T
supreme.justia.com
January 9, 2026 at 5:08 PM
Yeah, that's generally the rule. See supreme.justia.com/cases/federa...
You can think of it as similar to punitive damages in that the point is to deter state actors from violating the Constitution (assuming you think they internalize harms to their budget), not to make the right plaintiff whole.
You can think of it as similar to punitive damages in that the point is to deter state actors from violating the Constitution (assuming you think they internalize harms to their budget), not to make the right plaintiff whole.
Also, it is very hard to see the logic of how you could do traditional QE if you cannot print money. If you borrow to finance the QE, then, eh, you have not changed the trading volume of government debt. At best you are rearranging the term structure of the debt, probably at a net loss right now.
January 8, 2026 at 10:31 PM
Also, it is very hard to see the logic of how you could do traditional QE if you cannot print money. If you borrow to finance the QE, then, eh, you have not changed the trading volume of government debt. At best you are rearranging the term structure of the debt, probably at a net loss right now.
Finishing up a paper about this effect (and why it's awesome) soon. But actually in this case expectations would be of a vague possibility of a future 1% annual tax.
January 8, 2026 at 5:07 PM
Finishing up a paper about this effect (and why it's awesome) soon. But actually in this case expectations would be of a vague possibility of a future 1% annual tax.
How about a 1% (plus small deferral charge) tax for 5 years? Can I interest you in that?
January 8, 2026 at 3:58 PM
How about a 1% (plus small deferral charge) tax for 5 years? Can I interest you in that?
Yeah we have a little section on this in "Money Moves" wherein our basic take is states should probably decouple from most tax expenditures. Especially higher-rate states. Like, is the optimal subsidy amount for anything really 8 p.p. higher in California?
January 8, 2026 at 4:28 AM
Yeah we have a little section on this in "Money Moves" wherein our basic take is states should probably decouple from most tax expenditures. Especially higher-rate states. Like, is the optimal subsidy amount for anything really 8 p.p. higher in California?
Notably, though, the article fails to mention that it is now too late for a billionaire to leave to avoid the tax.
January 3, 2026 at 12:22 AM
Notably, though, the article fails to mention that it is now too late for a billionaire to leave to avoid the tax.