David Cay Johnston Syracuse University College of Law Rochester, Syracuse and New York City ______

David Cay Johnston Syracuse University College of Law Rochester, Syracuse and New York City _______________________________ David Cay Johnston is in his seventh year as a distinguished visiting lecturer at Syracuse University College of Law. He teaches the tax, property and regulatory law of the ancient world. He is a columnist for Tax Analysts, Al Jazeera America, and National Memo, a Newsweek contributing editor, and a frequent commentator on various national broadcast shows. Johnston is the immediate past president of the 5,000-member Investigative Reporters & Editors (IRE). He has lectured about tax policy, investigative reporting and ethics on four continents. He was awarded a 2001 Pulitzer Prize for his coverage of taxes in The New York Times. He was a finalist three other times. Among his five books is a best-selling trilogy – Perfectly Legal, Free Lunch, and The Fine Print – on taxes. Perfectly Legal won the 2003 investigative book of the year award. Johnston has been called the “de facto chief tax enforcement officer of the United States.” The Oregonian says his work equals that of Lincoln Steffens, Upton Sinclair and Ida Tarbell. The Joint Committee on Taxation valued two tax deals his reporting thwarted at more than $250 billion. He is the only American journalist whose work caused a broadcaster to be forced off the air by the FCC. At age 18 one of the nation’s largest newspapers, the San Jose Mercury, recruited him. At 19, Johnston joined as a staff writer. Over the next four decades Johnston was an investigative reporter for that paper, the Detroit Free Press, Los Angeles Times, Philadelphia Inquirer, and The New York Times. In 2011-12 he was the global tax and economics columnist for Reuters, where he revealed more tax games and that Singapore imposes stealth taxes that make it world’s most highly taxed country. Johnston attended seven colleges, including the University of Chicago, and earned more than enough credits for a master’s degree. In Los Angeles he taught for eight years at USC and UCLA. He has eight grown children and five grandsons. Johnston has been married to Jennifer Leonard, CEO of the Rochester Area Community Foundation, for nearly 33 years, but not long enough. Ronald D. Aucutt McGuireWoods LLP Tysons Corner, Virginia _______________________________ Ronald D. Aucutt is a partner in the Tysons Corner, Virginia office of McGuireWoods LLP and is co-chair of the firm’s Private Wealth Services Group. Mr. Aucutt concentrates on planning and controversy matters involving the estate, gift, and generation-skipping transfer taxes, the income taxation of trusts and estates, and the rules regarding tax-exempt organizations and charitable contributions. He has extensive experience in assisting clients with the transfer of wealth from one generation to another, particularly including the orderly and tax- efficient succession of family-owned businesses. He also advises lawyers and other professionals on tax planning and controversy issues across the entire spectrum of estate planning and charitable giving, including the complex rules governing generation-skipping transfers under chapter 13 and the special valuation rules under chapter 14 of the Internal Revenue Code. He is experienced in resolving tax issues through rulings in the Internal Revenue Service’s National Office and in administrative appeals throughout the country. He has contributed to the formation of estate tax policy through legislation since 1976, as well as in Treasury regulations, has served as an expert witness in estate and gift tax matters, and was named in January 2014 to the Internal Revenue Service Advisory Council. Ron was recognized as one of Washington’s 31 “Best Lawyers” in the December 2011 issue of Washingtonian and as one of the top 30 “Stars of the Bar” in the December 2009 issue of Washingtonian; he holds Chambers USA’s “Band 1” ranking for Wealth Management; and he was elected to the National Association of Estate Planners and Councils Estate Planning Hall of Fame and given the designation of Distinguished Accredited Estate Planner in 2009. He was awarded the 1995-1996 Estate Planner of the Year Award by the Washington, D.C. Estate Planning Council. His biography appears in Who’s Who in America, Who’s Who in American Law, Who’s Who in Finance and Industry, and Who’s Who in the World. He is also listed in the Best Lawyers in America. Ron is a Fellow and former President (2003-04) of The American College of Trust and Estate Counsel (ACTEC), an academician of The International Academy of Estate and Trust Law and former member of its Council (2000-04), a former Vice Chair (Committee Operations) of the American Bar Association’s Section of Taxation (1998-2000), a Fellow of the American College of Tax Counsel and the American Bar Foundation, and a member of the Christian Legal Society. He is also a member of the Advisory Committee of the University of Miami Philip E. Heckerling Institute on Estate Planning, the Editorial Board of Estate Planning, the Board of Advisors of Business Entities, and Tax Management’s Advisory Board on Estates, Gifts, and Trusts. Ron received a B.A. degree in 1967 and a J.D. degree in 1975, both from the University of Minnesota. He has been a lecturer in law at the University of Virginia School of Law. He has lectured on estate planning subjects at over 100 tax institutes and conferences nationwide and is the author of more than 150 published articles on estate planning and other tax subjects. Mr. Aucutt is co-author of Structuring Estate Freezes, published by Warren, Gorham & Lamont and supplemented twice a year. Ron was in the U.S. Navy from 1970 to 1973. He served in Vietnam and achieved the rank of lieutenant. Ron and his wife Bunny live in Falls Church, Virginia. They have two sons, David and Jamie, a daughter-in-law, David’s wife Evelyn, and a grandson Brayden, who all live in Chicago. A Transfer Tax for the 21St Century Economy ___ The MOST Plan ___ Lifetime Investment Accounts Syracuse University College of Law By David Cay Johnston Heckerling Institute, Orlando, Florida, January 2015 The American transfer tax system is economically, intellectually and legally incoherent. It double taxes, under taxes and, far too often, fails to levy economic gains. It has become so porous that a gift worth 1 $100 million can be passed through a $1.2 million tax‐free hole. Fortunately, we can design an economically, intellectually and legally coherent transfer tax system, one that flows from the new economic order of the Digital Age. I propose a new transfer tax system that will: Lower costs of tax administration and compliance Accurately and predictably raise revenue to finance public goods and services Encourage savings and investment in productive assets Eliminate the lock‐in effect of capital gains taxes End the rampant cheating in valuing gifts Levy all economic gains, inducing fairness Eliminate discounts to ensure integrity Make cheating impossible ‐ except by criminal conduct Limit the estate tax to super‐fortunes Encourage gifts to public charities, including endowments Discourage gifts to private foundations That may seem a tall order, but filling it is quite easy as we shall see, provided we do just one thing: change the way we regard our tax system, which in turn will allow us to see tax avoidance in a new light. We must change our perception of tax from dread, fear and even violent hatred to an appreciation of what taxes make possible: wealth creation, property rights, social stability and individual liberty. our liberties and our wealth commonwealth Our goal should be to create a tax system that will enhance by financing the vast array of goods and services, without which there would be no liberty and no wealth. 10‐2 To change this attitude we must start with those who prosper by giving sophisticated advice on tax avoidance, a form of tilting the playing field, especially when this advice involves technically lawful ways to game the system. All gains must, and should, eventually be fully levied so that all who prosper share in the costs of the government that enabled their prosperity. We can also encourage more saving and investment, creating an economically stable society in which older working class people2 like bus drivers commonly own their homes free and clear. The core element of this plan is creating Lifetime Investment Accounts (LIA) in which taxes on capital can be deferred until death. Drawing on our experience with defined contribution retirement plans, we can create plans with fewer restrictions and much more flexibility. Capital income would be taxed only upon withdrawal or at death. In the first case the capital is being consumed ‐‐ fruit taken from the tree. In the second the owner has ceased to exist, ending lifelong deferral on gains in her LIA. At death these accounts must be emptied promptly, with taxes withheld before transfer. There would be a one‐time deferral for the surviving spouse, but not for any subsequent remarriage by that spouse. A fiduciary, subject to strict liability, would stand guard to monitor deposits and withdrawals, as well as payment of taxes, ensuring integrity. The remarkably low costs charged by some of our biggest investment managers for the current defined contribution retirement plans tells us that the costs of having fiduciaries will be minor, so small they may not amount to a single basis point on large accounts. Some mutual funds charge retail investors as little as a nickel per $100 annually for all costs. st The 21 Century transfer tax system detailed below takes into account both liquid securities and assets that are either indivisible or hard to value, including objets d’art, buildings and privately owned businesses.

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