Professor Ventry Testifies Before State Senate Committee

On April 10, Professor Dennis J. Ventry, Jr. testified before the California State Senate’s Revenue and Taxation Committee on behalf of Senate Joint Resolution 14.

Sponsored by Sen. Josh Becker (D-Menlo Park), the resolution relates to (among other deferred-compensation arrangements) pitcher Shohei Ohtani’s $700 million contract with the Los Angeles Dodgers. The contract defers $680 million for 10 years, thereafter payable in equal installments over 10 years.

The arrangement aims to exploit a 1995 federal law that preempts a state's taxing authority from taxing this form of deferred income when the taxpayer takes receipt of the income after leaving the state (or states) in which it was earned. SJR 14 asks Congress to prevent millionaires and billionaires from exploiting the law, which, Ventry told the committee, was intended to protect the retirement plans of modest-income workers, not rob states of unlimited amounts of revenue.

Ventry also said that California could challenge these arrangements on its own by (1) leveraging the judicial presumption against preemption; and (2) using substance-over-form arguments to show Congress never intended it to be used by billionaire beneficiaries. 

Professor Ventry is an expert in tax policy and legal ethics. His research interests include tax expenditure analysis, family taxation, professional responsibility and standards of care, tax filing and administration, tax compliance, public finance, and tax and legal history. He is the former chairman of the IRS Advisory Council, and co-author on the casebook, Federal Income Taxation with Martin McMahon Jr., Daniel L. Simmons, and Bradley T. Borden.