27 NewsQuarterly 1 (2007-2008)

handle is hein.journals/newsqtrly27 and id is 1 raw text is: POINT & COUNTERPOINT
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With the highest number of French voters going to the polls in 40 years (84%),
Conservative Nicolas Sarkozy defeated Socialist S6golene Royal in France's
presidential election in May. Sarkozy's platform for France was one of change,
attempting to spur economic growth that was 2.1% last year, an increase that
ranked tenth of the twelve European countries that utilize the euro.

Point & Counterpoint            1
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From the Chair                  3

To stimulate the economy, the world's
sixth largest and second in Europe to
Germany, Sarkozy proposes the elimina-
tion of a 2000 French law that mandat-
ed a 35 hour workweek, a law designed
to help create jobs for more people and
give current workers more personal time.
Sarkozy claims that the law did not cre-
ate additional jobs but instead created
expectations of current workers to do
more in less time. To encourage French
workers to work more and to improve
the slumping French economy, Sarkozy
proposes to make overtime pay tax free.

In this Point & Counterpoint,
Professors Richard Schmalbeck and
Michael McIntyre debate the merits
of taxing labor income. Professor
Schmalbeck offers his view that
Sarkozy's plan offers a genuine choice
between work and leisure. Professor
McIntyre argues that his plan raises
significant policy issues of tax fairness.
The NewsQuarterly encourages readers to
submit responses or comments to these essays,
which may be published in a subsequent issue.
-Christopher M. Pietruszkiewicz, LSU Law
Center Baton Rouge, LA

News Briefs                    4
Interview: Sheldon Cohen       5
Points To Remember            13
(1) Health Savings Accounts; (2)
Guidance on Sections 403(b) and
409A; (3) Shrinking Boomer Social
Security Retirement Benefits
Tax Section                   22
Survey Report
National Conference          24
Tax Gap Report
Government Submissions Boxscore 28

The Sarkozy Proposal is Worth a Try
By Richard L. Schmalbeck

There is much to be said for this plan
on grounds of efficiency. Oversimplifying
more than a bit, one can say that taxes
tend to be less efficient if they distort
people's choices. So if people buy a sec-
ond-choice good because of a stiff tax on
their first choice, or pass up an oppor-
tunity to make some extra cash working
an occasional Saturday because of an
*Duke University School of Law, Durham, NC.

income tax rate that's too high, there is
a loss in consumer welfare.
Economists generally think that taxes
on income from employment are accept-
ably efficient, because they do not seem
much to prevent people from engaging
in employment. This is in part, however,
because of rigidity in labor markets. We
continued on page 10

CLE Calendar
Tax Bites
At the Ballgame
Committee Spotlight

Defending Liberty
Pursuing justice

Secton o  Taxtio
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