House Republicans are continuing their efforts to oppose a US Labor Department rule on environmental, social, and governance retirement investing, despite failing to override President Joe Biden’s veto of a resolution to kill it. Republican lawmakers are now working on legislation with former DOL Secretary Eugene Scalia that would modify the Employee Retirement Income Security Act of 1974 to ban retirement plan fiduciaries from considering non-pecuniary factors such as ESG when investing in retirement accounts. The new bill, the Ensuring Sound Guidance Act, is expected to go through the House Financial Services Committee and the Education and the Workforce panel, led by Virginia Foxx, which has jurisdiction over ERISA. The move comes as Republicans seek to counter the ESG movement, with some arguing that it politicises Americans’ retirement accounts and represents “woke capitalism”. The bill, which would require retirement account managers to consider only pecuniary factors when investing, would mark a dramatic escalation in the GOP’s opposition to environmentally and socially conscious investing. The Republican position on ESG investing faces added scrutiny from benefits advisers, who favor a process-based legal strategy to ERISA law.
To be clear, the Department of Labor rule would merely permit investment managers to consider ESG issues if they so choose. No such considerations are being compelled and no measures to mandate ESG considerations have been seriously proposed. Once again the rule would merely permit managers to consider such non-pecuniary factors when choosing investments.
The US Commodity Futures Trading Commission (CFTC) has sued Binance, the world's largest cryptocurrency exchange, and its CEO Changpeng Zhao (CZ) for allegedly breaking US derivatives rules. The regulator has accused Binance of failing to register with it and failing to implement an effective anti-money laundering programme. The CFTC claims that Binance has deliberately put profits ahead of the law and made no effort to comply with US regulations. It also accused Binance's CEO, Changpeng Zhao, of ordering the destruction of documents, instructing US customers to use VPNs, and directing clients with US connections to open accounts under the names of shell companies. While the CFTC cannot bring criminal charges against firms or individuals, it can seek hefty fines and other penalties. Binance has called the CFTC lawsuit “unexpected and disappointing” and claimed it has been working with the regulator for over two years.
Alphabet, the parent company of Google, has requested a US federal judge to dismiss a Justice Department lawsuit alleging that Google illegally abused its dominance of online advertising. The government filed the ad tech lawsuit in January, claiming that Google should be forced to sell its ad manager suite, but Google denied any wrongdoing. The company argued that the case should be thrown out because the government erred in defining the online advertising market and excluded powerful competitors such as Facebook. Google also stated that the government's estimate of Google's ad exchange as having "more than 50%" of the market fell short of the 70% needed to allege market power. The case is being heard by U.S. Judge Leonie Brinkema in the Eastern District of Virginia. The Justice Department's ad tech lawsuit follows a separate lawsuit filed in 2020, accusing Google of violating antitrust law to maintain its dominance in search. That case goes to trial in September.
Concord Law School at Purdue University Global, the first online law school in the United States, is seeking a rule change from the Indiana Supreme Court that would allow its graduates to take the state's bar exam. Currently, California is the only state that permits online law school graduates to sit for the bar. The Indiana Supreme Court is now seeking public comments on the proposal. Purdue law dean Martin Pritikin said that the change would make legal education more accessible to people living in rural and underserved areas. The court is expected to consider the proposal in the coming months.
Knock knock …. Who’s there? … My column … My column who? … My column about how we can learn and improve from the French tax code.
The idea that modernizing the US tax system is insurmountable seems to be behind every accountant and tax attorney’s grimace and tears when discussing the complexity of the code and filing process. And yet, we have an alternative system just across the pond. The method of processing income tax returns in France is automated and relies entirely on an algorithm written more than 30 years ago and designed to run on a processor a third as powerful as the one that counts your steps in your cell phone.
France has an automated tax filing system that relies on an algorithm written and maintained by the French Public Finances Directorate. Despite an aging technical infrastructure, French taxpayers use a portal with pre-filled forms, and the algorithm handles all calculations. The French tax code is released under a free software license called CeCILL 2.1, which has been adapted from the GNU General Public License. The French tax code is not simple, as the computation algorithm has 92,000 lines of code. France has undertaken projects to modernize the tax code by reverse engineering the algorithm from publicly available parts and implementing in software the rules of the actual French tax code. The French tax code experience teaches the US to standardize and formalize its tax code, make it algorithm ready, commit to release all algorithms and software code used in public projects, and demand simplicity, automation, and transparency from the government without huge expenditures. A sea change in technology is coming to the tax world, let's make sure a rising tide raises all boats.