hanlon. mr. neubig, you're recognized for five minutes. >> thank you for the opportunity to testify. i was an economist at the u.s. treasury's office of tax analysis from 1980 to 1990 during the development of the 1986 tax reform act. financial accounting issues were not very important then, but over the last 25 years, i've seen their importance grow not only at the federal level, but also in terms of state tax policy and tax policy in other countries. in 2005, president bush's advisory panel on federal tax reform outlined a business cash flow tax that allowed first year 100% writeoff of capital investment like bonus depreciation. one might have expected that this plan, which many of my economists brethren claim results in a zero effective tax rate for new capital investment would have received strong support from the business community, but it did not. this led me to consider a number of reasons why many economists often predict the effects of tax reforms much differently than the business commu

hanlon?>> i would ago the comments. the rules now in terms of leaving the united states are pretty harsh. congress has taken care of that movement for tax purposes offshore. and it's more, as we've said, offshore companies getting bigger is what you're saying. >> all right. ms. hanlon? >> i would agree with all these things but i think tax is one factor but the research is quite clear that investment is attracted to lower tax rates, but it is only one factor. there's a lot of other things that companies consider. acquisitions do happened generally whether for and acquire will acquire the u.s. company but oftentimes because of the tax considerations, you would want to acquire a u.s. company would want to acquire foreign. it would be hard to acquire foreign company and poll that foreign company into the u.s. tax system. and is also depends on the type of business whether investment, how much tax drives, where the investment goes based on the tax rate. some companies just have to go where their

hanlon's comments. just for example, the example of moving to ifrs has impacted in terms of some of the discussion about u.s. tax reform. because if you move to ifrs, then lifa would not be allowed. it would automatically eliminate the current ability of some firms to use last in-first out accounting. there clearly is different rules for the accounting rules. and as a tax committee, you have different goals including revenue that are your objectives. >> i'd agree with most of what was said before me. really, the accounting rules are there for something completely different than what our tax rules should be there for our tax rules. it's to get revenue, but should it be done in a man they're promotes growth, investment, jobs. and those are just two completely different worlds. and so i would encourage us to keep them separate. >> okay. and have i just a few seconds left. so could the businesses just quickly talk about -- we talked about reforms and the challenges to reforms. could you just briefly talk ab

let me introduce you first to stuart hanlon, at my immediate left. stuart is a defense attorney of great renown. he has over 30 years of experience, including some of the country's most high-profile cases. including cases involving police and official misconduct. next to him is our san francisco police chief, greg suhr, newly appointed to that office last month. congratulations, chief. >> thank you, your honor. [applause] >> chief suhr has surfed in the department for 30 years. and as chief he will be overseeing a department of 1,800 police officers. next we have peter herley who is now acting as police consultant. he is the former chief of police of tiburon and the former president of the california police officers association. next to mr. herley is sharon wu, the chief assistant of operations in the district attorney's office. she oversees the criminal division, including the victim witness program and the alternative dispute courts. anne irwin is an attorney in the public defender's office. ms. irwin was recently involved in several of the cases i

i wanted to ask professor hanlon if she knew how much she and i had o, don't. but i'd like to hear it. >> well, you will. if you dig out the 1953 -- long before you were born catalog of the sloan school, you will find at the very bottom of the list my name as a teaching assistant. now, you got there through a resume that's of accomplishment and academia that is outstanding. i got there in a somewhat different manner. up until 199 -- 1953, m.i.t. had a perfect record of placing its graduates with general motors and general electric and all the companies. but they came to the end of the list in about accept and one stark was still unemployed. they solved that problem, they said we'll make him a teacher. and i must say you have improved the appearance of the sloan school magnificently and made accounting look a lot more attractive than i remember it to being from what the -- whatever was next to the window. i want to thank you. in some more seriousness, i'm concerned about some of the issues that we create tax expenditures for in their usefulness. i'm going to ask

hanlon, in his testimony mr. heenan argues that promoting investment accelerated depreciation is, perhaps, a more powerful tool than lower overall tax rates. you, however, say with respect to targeted tax incentives such as bonus depreciation, there's very little evidence that these policies have spurred any investment. can you comment on that? >> yeah, my statement is based on the, you know, the weight of the evidence and the literature. and basically, there are papers that will show there's a time effect. so firms will shift a purchase of equipment to a period that's earlier, say, by december instead of january. there's also evidence that firms will purchase a different class of asset. but what we can't tell in the literature and what is very difficult to parse out is whether these are, you know, part of it's just timing. part of it's just shifting. and some of it could just be a change in reporting. in other words, when you say a certain class of asset gets a certain benefit, they might just now record differe

hanlon? >> i would agree with all these statements. i think the complexity takes a lot of time. as tom was saying earlier with the compliance costs. they're very high. and i also agree with the small business. i think small businesses have a very hard time with the complexity. they don't have the internal tax departments. and what they really should be doing is focusing on their business. but instead they spend a lot of time worrying about, you know, how should they compensate themselves, how should they structure their business, where who they structure their business, in the u.s. or somewhere else because of the tax code. and i think making a more simple, more fair system would help the u.s. >> thank you. >> mr. neubig, do you have a comment? >> again, i think this is another example of where oftentimes the economists don't give lower corporate tax rates the full benefit that would happen if there was a broader base and lower corporate tax rate. that uncertainty, complexity, and how lower corporate tax rates affect so many different business decisions really is very powerful.

hanlon? >> i think one thing to keep side of -- sight of, if we're giving people the power to carry a gun and arrest citizens and put them in jail forever. we talk about how we deal with this situation, to minimize it and say it is just a few officers, the department is generally ok, that there is not a culture here, whether it is a code of silence or a code that we can do what ever we want, it is not dealing with the problem. [applause] i believe that it has to be dealt with. but it cannot be dealt with by minimizing it and saying there's too much media about this stuff, that it is not fair. it is fair because the police are given this incredible power. more than anybody else. you know, i can deal with a cop in court, but i will not mess with him on the street, because he can tell me or arrest me. there has to be a standard -- he can kill me or arrest me. there has to be a standard. ianne is talking about her clients are basically on the street. this is not a minor problem. [applause] >> we

professor hanlon, we've all been considered about the uncertainty of the tax code. oftentimes things get renewed retroactively. it creates a lot of problems from a compliance standpoint. i would like you to elaborate on how do you deal from a financial accounting standpoint with these and talk about some of the problems that therein lie with temporary measures? >> the temporary provisions i think cause similar difficulties on the tax side and the book side in a way that they ever just unpredictable. it's hard for companies to plan. it's hard for them to make long-term investments given these fits and starts in the tax code. and the accounting just will fall out in a sense accounting just accounts for whatever happened. it's hard for them to predict that what effective tax rate will be and they're benchmarked on that tax rate to other companies. i think it's just unpredictable for them. it's hard to make investment decisions when things are in flux like that. >> thank you. and gentlemen, you all are look at this from the private sector. you have to deal with this. co

hanlon, you're recognized for five minutes. >> thank you. chairman camp, ranking member levin and distinguished members of this committee, thank you for the opportunity to testify before you today. the main point of my testimony is that the responsiveness to tax policies can be affected by the financial implications of those policies. i would like to first offer some general examples of the importance of financial accounting to managers of publicly traded companies. one example is found in a study of companies accused by the sec of fraudulently overstating accounting earnings. it turns out that these companies also overstated their income to the irs and paid taxes on their inflated accounting income. this suggests that these companies were willing to pay substantial sums of cash in order to report higher accounting earnings. a second example is found in a recent survey of tax executives of publicly traded companies. 85% of the tax executives said that top management at their company using the accounting effective tax rate as being at least a

and also stuart hanlon as well as the bar association of san francisco.ve a round of applause for our sponsors today . let's get down to it. so before we get started i want to introduce someone who's a wonderful leader in our community and that's the president of the bar association of san francisco. >> thank you. thank you, jeff, for inviting me on behalf of the bar association of san francisco. i'm priya sanger. i'm president of the bar association of san francisco. basf, as we note the bar association to be called, has had a long relationship with the public defenders office. it is crucially important for administration of justice. and so is san francisco conflicts panels where administration, which the bar association has provided in partnership with public defenders. so in san francisco when a public defender has a conflict of interest, criminal defendants and minors are represented by private attorneys from a panel administered by the bar association of san francisco. maintaining this independent body of attorneys is critically important as a well-r

-- and i cannot believe i am going to say this -- i completely agree with john burris and stuart hanlon. [applause] >> thank you for giving my closing comments from me. i would like to thank the public defender's office for providing the public and anybody he wants to come to this forum, hearing from these experts, and they help you take away some good things from this -- and i hope you take away some good things you take away some good things from this panel. >> so many people here. this is the third and final panel for those of you who have stayed. this is going to be an incredible discussion. leading the panel, this is the chief attorney of the public defender's office, matt gonzalez. >> let me talk about how we decided to have a panel as part of this year is just a summit on the death penalty. san francisco is often known for being a large city, in this case, we have a unique history with the death penalty. during his reelection campaign of 1999, terrence hallohan said that they would not seek the death penalty for any offense in san francisco. he was reelected by a close margin a f

hanlon, but if someone is proven to be dishonest, it is my intention not to have those officers in the san francisco police department anymore. [applause] >> mr. herley, you have been a police chief and dealt with police conduct as a consultant. do you have anything to add to what chief suhr has said about preventing misconduct in a police department? >> thank you for having me. i do have to point something out. i was not the president of the california police officers association. it was the california police chiefs association. i spent 21 years in the city of torrance in southern california before coming up here, a city of to under 50,000, about 350 personnel. -- 250,000, about 350 personnel. much smaller organization. completely different type of agency. but one of the things we found was to my career and particularly at the beginning, there was really no classis% -- classes pe se, and we started a course on how to be a successful chief. a very strong component of that was an ethics, and what is the chief's responsibility within their department relating to at the experience include