Part 56 – The Little Red Transition Tax Book

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Purpose

On February 6, 2026 I interviewed Professor Hank Adler on his latest article in Tax Notes titled:

“When An Income Tax Is Not A Tax On Income”

Professor Adler notes that although the transition tax was based on untaxed income, the rate of tax payable was dependent on what the retained earnings had been invested in. Notably:

– the portion of retained earnings invested in liquid assets was taxed at a higher rate than;

– the portion of the retained earnings invested in less liquid assets.

Professor Alder questions whether this can truly be an income tax. Or rather it is a tax based on how earnings have been invested.

John Richardson – Follow me on X.com/Expatriationlaw