Photos by Dana MaxsonFordham’s Gabelli School of Business rolled out the red carpet for its highest achievers on May 16 at its annual Awards Night celebration at the Rose Hill campus.

The ceremony, which took place in the McGinley Center’s student lounge, brought together about 400 students, faculty, administrators, friends and families, who sat on three sides of a stage.

Speaking to graduating seniors at the McGinley Center Ballroom, Dean Donna Rapaccioli, Ph.D., implored them to remember the helpers in their lives. The notion that one can be successful all on their own is a lie, she said.

It’s also useful to remember organizational psychologist Adam Grant’s theory that people are generally givers, takers, or matchers, she said. We vacillate between the three at different points in the day, but in general, those who gravitate toward one specific model are more successful.

“In business, you might think it’s the takers: Hard-charging, take-no-prisoners types who pull themselves to the top no matter what. Or you might think it’s the matchers: People who master the delicate negotiation of ‘you scratch my back, I scratch yours.’ But it’s not. It’s the givers,” she said.

Their accomplishments are many, including jobs at the likes of Barclays, BlackRock, J.P. Morgan Chase, Blackstone, Amazon, Instagram, Adobe, BBDO, Nike, and all of the Big Four accounting firms, and Rapaccioli lauded them for being supportive of each other in hard times. Deep down, Gabelli School graduates are givers, she said.

“You have completed four years at a business school that is caring, not cutthroat. You have learned to use your business skills to advance society and the plight of others. You are interested not only in a great salary and a great apartment, but in doing something that adds good to the world,” she said.

Caroline Dahlgren, GABELLI ’11, recipient of the Alumnus of the Year Award, echoed that refrain, telling graduates that it’s now their turn to help each other. That’s how she connected with Tiffany & Co., where she is currently manager of global consumer insights, she said.

“Fordham said yes to you when you were accepted, and along the way, professors, deans, mentors, peers, coaches, parents, and maybe even some alumni said yes to you,” she said.

“But I ask now that no matter how busy you are, to find the tiniest block of time for that Fordham student who inevitably reaches out to you. Now you might say, ‘I can’t hire them, I can’t give them profound career advice—I just graduated.’ That may be true. But I ask that you not be afraid to impart even the smallest nugget of wisdom and experience with them. Its valuable. That’s the beauty of the Fordham community. We can support each other even in seemingly small ways.”

The class of 2019 featured two valedictorians, Clara Gastaldi and John Lichtmann.

Gastaldi, a finance and marketing major who minored in fashion studies and was a member of the women’s soccer team, compared her acceptance to Fordham to the U.S. welcoming her parents from Argentina 20 years ago. Her parents, she said, taught her the value of embracing the unknown with that move.

“Through hard work and dedication, they opened a world of opportunities for me and my three brothers. Whenever I had even the wildest of dreams, you always had my back and pushed me to do everything to my fullest potion,” she said, pausing to address her mother in back of the McGinley Center ballroom.

“Mom, please don’t cry.”

A “passion for fashion” that she had since she was a little girl, walking around in pink plastic high heels, led her to Fordham.

“I knew that my future was in New York. So, when the opportunity presented itself, I packed my bags, made the switch, and reported for preseason in August of 2016,” she said.

“In the same way that the United States welcomed my family, Fordham University and Fordham athletics took me in when I transferred to the Bronx from the University of Georgia, just after my freshman year, and for that I’ll be forever grateful.”

For Lichtmann, an accounting major who commuted two hours to campus from New Jersey and is pursuing an M.S. in public accounting at the Gabelli School, his time was bittersweet, tinged with the sudden loss of his mother right before Christmas his sophomore year. He was devastated, and unsure he’d be able to return to Fordham, he said.

“However, I kept faith that God would guide her safely to heaven, and I learned to trust the people around me to help adjust to my new lifestyle. I decided that I had to work harder and focus even more on school so I could make her proud,” he said.

Lichtmann was able to maintain a sense of humor as well. He joked that he was not really in any position to tell anyone what to think, because he only got to be on stage “because I was able to balance debits and credits for four years.”

“What I can tell you is, people will remember you for your actions. Opening the door for a stranger, greeting a co-worker with a hello—kindness and respect are contagious. At the end of the day, knowledge is power, but how you use that knowledge to affect lives of others is even more power,” he said.

“I hope to see a future where accountability is a virtue, dreams can become a reality through hard work, and people choose cooperation and collaboration over division.”

Capstone student awards include the Alumni Chair Award, which was given to Maxwell Lynch, the Mozilo Future Distinguished Alumnus Award, which was given to Morgan Mezzasalma, and the Dean’s Award, which was given to Amanda D’Antone.

In addition to recognizing dozens of students from the Gabelli School at Rose Hill with awards throughout the evening, the event also celebrated faculty contributions. The Dean’s Award for Teaching Excellence for full-time faculty went to Stanley Veliotis, Ph.D., associate professor of accounting and taxation; the Dean’s Award for Teaching Excellence for adjunct faculty went to Linda Luca, adjunct professor of marketing; the Faculty Cura Personalis Award went to Nancy McCarthy, lecturer of communications and management; and the Faculty Magis Award went to Barbara Porco, Ph.D., clinical associate professor of accounting.

To get a better understanding of areas as disparate as brackets, the alternative minimum tax, and S corporations, we sat down with Stanley Veliotis, Ph.D., an associate professor of accounting and taxation in the Gabelli School of Business.

Full transcript below:

Patrick Verel: What are your general thoughts on the tax reform plan that’s being debated in Congress right now?

Stanley Veliotis: One thing I like is that they are attempting to go towards simplification. There are a lot of provisions they’re trying to get rid of that will simplify the tax return, and probably do get to the point where they can have that little postcard that more and more people could file. I’m still sort of up in the air as to what the true redistribution of wealth part will be. As a teacher of tax, as a person that writes about this stuff, I like the complication because it makes me feel important and powerful, knowledge being power, but in the end it is very inefficient for people to be spending more money on a particular tax bit of advice.

Patrick Verel: One of the key features of this tax bill being debated is a reduction of the tax brackets from seven to four. Why does this actually make tax planning harder, though?

Stanley Veliotis: When you go from having the seven or eights we have now, which start at 10 percent and slowly get up to 39.6, with chunks of income progressing from 10 to 15 to 25 to 28, a person can get used to their tax bracket. So if they work a little bit of overtime, they’ll know, okay, I’m probably still gonna pay the same marginal tax rate on the next bit of overtime that I make, or a bonus that I get if I’m a Wall Street banker. If you start having longer and longer tranches of income subject to a rate, and then all of a sudden the next tranch of income is taxed at double the rate as you go from 12 to 25 percent, it’s pretty dramatic.

Because if all of a sudden I work enough overtime or make a bonus that’s big enough to then throw me into that next tax bracket, let’s say going from 85 to 95,000 is where the rates jump from 12 to 25 percent, all of a sudden I’m getting a bonus that I thought would have been taxed at 12 percent based on my common experience. Under the new law all of a sudden its being taxed at double the rate. Sometimes people don’t want to work a little bit harder if they’re not going to keep as much of the money as they’re used to keeping. Of course, the comeback is well, just having three or four rates is much more simple for people, but in the end that’s a trivial marginal benefit to people, because we have software that calculates the stuff, the forms have all this built in. I don’t like the drastic 12 to 25, 25 to 35, I like slight increments.

Patrick Verel: You’re also not a fan of creating a repatriation holiday that allows U.S. corporations to bring home overseas earnings, which I understand is also a feature of the proposed legislation.

Stanley Veliotis: So the way the law works now and for many, many years, the U.S. multinational corporations based in the U.S., they don’t consolidate their foreign operations on their U.S. tax return when the report to the I.R.S., they only report their U.S. activities. The foreign corporations that these big companies have overseas, that income’s taxed by the U.S. only when it’s brought back as a dividend, the so-called repatriation, the money comes back home. So what all these companies are doing is, they don’t want to bring the money back home ’cause they don’t want to pay the U.S. tax on it. So they park it overseas.

About 13 years ago there was a holiday put in, a one year tax reduction if you brought back these monies we’d give you a very low tax rate. I think it was about 10 percent compared to the normal 35 percent. Low and behold, all these companies bring back, I don’t know, a trillion dollars, and people thought that will help stimulate the economy. They’ll use this money to invest in more labor, and increase the manufacturing capacities here. And in the end a lot of the money went to things like buying back stock, executive bonuses.

So if we do another holiday now or a reduced rate when the money comes back, are we basically tempting these corporations to keep leaving the money overseas and then waiting for this form of amnesty. Now this conversation’s much more complicated than we’re letting on here, because there is talk of stopping the taxation of overseas earnings for perspective earnings. So when I complain about where we’re going to set these people up for this addiction to a holiday every 10, 20 years, their comeback could be, well, we don’t plan to tax future earnings anyway, it’s a one-time thing. Then fine, then let the past earnings wait to be taxed when they come home and we’ll get the full up to 35 percent, versus this holiday rate.

Patrick Verel: Why, in this current plan, is the Alternative Minimum Tax and the Estate Tax potentially also on the chopping block?

Stanley Veliotis: The Alternative Minimum Tax, the A.M.T., it’s been considered for repeal for many years because first of all, it complicates tax returns dramatically. I talked to some C.P.A.’s that have trouble understanding it. I finally have gotten my hands around it. But it’s also unfair. The A.M.T. basically disallows certain deductions on our tax returns, so for example, people in the heavily taxed states like myself in New York, Connecticut, New Jersey, we cannot deduct our state taxes for purposes of A.M.T.

Instead of just disallowing these state tax deductions for everybody and being open and honest about it in Congress, they do this alternative calculation where people don’t even understand why they’re paying A.M.T., they just know they have to pay it. When they first put A.M.T. in, it was put in because they wanted to capture these couple hundred rich people in the late ’60’s, early ’70’s, that were not paying taxes of all these exotic tax shelters. So when they put it in, they disallowed certain items and said, okay, we’re not going to allow these, but then again we’re only going to worry about people that make a lot of money, so we’re going to give a big, fat exemption of about, I don’t know, 30-40,000 dollars. So that covered 95 percent of the world, of the U.S., so no one paid it except for very few rich people.

The exemption of that 40-50,000 number was not indexed for inflation until very recently, so every year it started capturing more and more people as salaries for a C.P.A. went from 5,000 a year to 50,000 to 75,000 a year. So it was very unfair that the intent of it was to get the rich, rich, rich where benefiting from sexy tax planing and a lot of this transactions, and then by not having the exemption big enough it started capturing “innocent” people like myself who’s just living their life, working for a living, owning a home.

So getting rid of it, to me, at least makes it fairer for people like me … Again, maybe I sound selfish ’cause it’s about me, but a lot of people are like me. This is the one chapter in the course that I teach where the students are trembling. They’re trembling because … And then I told them today, I won’t put it on your final exam because I have a feeling it might go away, and I could see the sigh of relief because they had heard about this being the most difficult chapter in the tax class.

So Estate Tax, the theory behind why people say it’s unfair to defend it … to defend the repeal, I would say, it is sort of double taxing the same income. An Estate Tax is levied on your final net worth. Whatever’s left over, you try to leave to your family and meanwhile, that other third or half of it gets chopped away in taxes. I can see why people argue it’s sort of one last painful bite at you when you’re literally dead and you can’t defend yourself. And an example they keep throwing up is it’s not just for the super rich that it’s unfair, how about the practical problems it causes for the family farm.

You hear about the family farm case, we’re out in the Midwest, you’ve … your grandpa years ago was running this farm, and those 200 acres was successfully growing corn or whatever, and then he left the home to the three kids, and those three kids now have 20 grandkids. The 20 grandkids are now inheriting the farms from their parents … the farm from their parents, and now that real estate is worth $200 million, or $100 million. To make them pay almost half of it in Estate Tax means that they have to liquidate the farm. The problem with the way its being couched here is a lot of this is meant to be helping the common person to try to build out the middle class. No middle class person is paying this tax, because the Estate Tax doesn’t apply until you get up to the $6 million or higher number.

Patrick Verel: The central point of the plan seems to be that the middle class and the rich will benefit in the beginning, once it’s passed. But as time goes by, the benefits to the middle class are going to go away, while the benefits to the rich will live on. Is that a fair way to think about this?

Stanley Veliotis: I think it is. Well, one thing is the Estate Tax. Clearly the Estate Tax being reduced will benefit the wealthy forever and ever and ever, whereas the poor don’t get any benefit from that ’cause they’re not paying it. The second part, the concern is in the short run, some of the people on the lower end of the income scale will benefit from having a doubling of their standard deduction and getting this Child Credit credit, so they might save a little bit of money in the long run … in the short run. But as the years go by, that standard deduction will go up only with a limited form of inflation, so we’re talking that 2012 … that $24,000 standard deduction in five, six years might only be about 25, 26,000.

But when you look at the wealthy who basically you’re going to see their corporate earnings, the corporations have their tax rate cut dramatically and a lot of wealthy people own a lot of stock, so they indirectly benefit from their corporations paying almost half the tax rate. They’re also going to benefit to the extent that they have these what they call Flow Through Entities, these investments in pass-through, flow-through partnerships, Limited Liability companies, as corporations. These would be the investments they have in businesses that throw off income, that’s not taxed at the corporate rate, instead the income passes through to the owners and they’re taxed on it immediately. And currently they’re taxed, these millionaires, are taxed at the highest rate, 39.6. They put in this preferential rate a cap of 25 percent for a big chunk of it.

So you see a lower income level person saving a couple of thousand a year. Meanwhile you have people that, every year, make more and more and more money ’cause they’re very successful with successful businesses, paying no more than 25 percent on a lot of this flow-through income. Plus if they have income in these corporations that trade on Wall Street, then they pay tax at half the rate from before. The numbers are staggering in terms of the difference.

Patrick Verel: You mentioned something that, it was fascinating, that I read about this S corporation. If this all goes through, you could potentially see individuals basically form their own corporations that are just themselves to take advantage of those lower rates.

Stanley Veliotis: Right. They do have an exception for personal services companies, so they were worrying about that. For example, a baseball player just forming a Limited Liability Company or an S corporation, and says pay that money to this corporation of which I’m the only employee. Right? There’s a provision of this that talks about. However, if a personal service is … professional services are what this entity is doing, then the regular rate applies.

But I’m glad you mentioned that because I forgot to say … Going back to complexity, the desire to make thing easier. This came up yesterday during the testimony from the Ways and Means Committee. One of the Democrats said we’re looking at all these big, fat regulations here, we’re trying to reduce them. Don’t you realize that once you put in this new 25 percent cap on past year income, the concern that you have right there is now gonna say we need regulations to determine what counts as services? You’re basically trading some complexity that goes away with other nice things we’re hearing getting rid of on Schedule A, for example, but now we’re going to need a whole bunch of regulation on trying to avoid the scam that you’re basically put your finger on and you’re not even a tax person.

Patrick Verel: Now Lee Zeldin, a Republican Congressman from Long Island, recently told New York Times that it would be impossible for him to vote for the bill in its current form. He called it a “Geographic redistribution of wealth,” because it eliminates the deductions that residents of states like New York rely on to cushion the pain of local taxes. How common is it for this kind of regional clashing, if you will, when it comes to tax reform?

Stanley Veliotis: As it happened before … Mentioning taxes in Florida, maybe about 10 years ago those states started complaining, wow, you people up North and out West get to deduct your state taxes, we don’t have any here, therefore, we don’t get the benefit you get of being able to deduct them. Now of course, they’re not paying them so I’d rather be in a position where I’m not paying them at all then paying them and deducting them. But I can see their point. So instead, they got a sales tax deduction put in. So the current law says, here, we’ll look at your Schedule A, there’s an election. I’m going to deduct state and local income taxes, or my state and local sales taxes. The greater of the two people pick.

So in the Northeast our income taxes are obviously, much higher. But in the South … Well, Florida taxes and other states that don’t have an income tax, all the people there are electing the sales tax. So that’s an example of how they lobbied for something that they normally wouldn’t have cared about, but because they saw these other states benefiting from deducting your state and local income taxes … Hey, why don’t you give us something, give us state and local sales taxes. So that happened, in a sense, before.

Now getting rid of this deduction also will, ironically, bother them because they’re losing their sales tax deduction, but not as much as it hurts the people up here, because sales tax is a small number.

The Center for Professional Accounting Practices (CPAP) nurtures interdisciplinary collaborations among policymakers as well as accounting, auditing, tax, and forensics professionals through informative research, workshops, lectures, and conferences.

“We really want to be a catalyst for change and a think tank for considering information,” said Barbara Porco, Ph.D., a clinical associate professor of accounting and taxation and co-director of CPAP.

With an emphasis on research of current practical relevance and cultivating partnerships with distinguished advisers and professionals who are engaged in innovative work, CPAP is primed to be on the front line of change in the marketplace. This approach will also allow the center to bridge the gap between academia and the accounting profession.

“Our goal is to reflect what’s happening in the practice,” said Stanley Veliotis, Ph.D., associate professor of accounting and taxation and co-director of CPAP. “If we’re just talking to our own students, then we’re talking to ourselves. This is an opportunity to get the word out to people who are also practicing accounting.”

Last fall, CPAP hosted “OECD’s Base Erosion and Profit Shifting (BEPS) Project and International Corporate Tax Avoidance,” which highlighted changes in the international tax system and the tax planning techniques of global companies. The panelists included notable accounting experts Greg Ballentine, Ph.D, a former associate director of the U.S. Treasury’s Office of Management and Budget; Reed College professor Kimberly Clausing, Ph.D, an award-winning researcher on international taxation and tax avoidance; Manal Corwin, KPMG LLP’s national service line leader for international tax; and NYU Law professor Mitchell Kane, a former clerk for the Honorable Karen LeCraft Henderson of the U.S. Court of Appeals for the D.C. Circuit.

Though CPAP is in the early stages of its development, its directors said it has the potential to create impact by promoting engaging discussions, not just about current tax issues, but also about auditing and assurance, fraud, financial analysis, and sustainability reporting. According to Porco, these practices tend to overlap, but have traditionally been examined separately in academia. CPAP hopes to change that.

“Accounting professionals have to understand data analytics and how information is processed in order to audit and provide assurance,” she explained. “They also have to understand how the data is stored, communicated, and transferred.”

Porco said a holistic approach to accounting would enable practitioners to confidently cultivate financial, environmental, and social growth—or a “triple bottom line” for their clients and organizations.

CPAP is equally committed to furthering conversations about the latest strategies for detecting fraud and best practices in fraud prevention, which can ultimately take the profession to new heights.

“The center is a breeding ground to talk about things that can lead to improvements and policy changes in the profession,” said Veliotis.

April is the month when the taxman cometh. It is also when the government generates mountains of data about how it interacts with Americans and their income.

Public information about tax trends is a basis for research by Stanley Veliotis, Ph.D. (LAW ’89), assistant professor of accounting and taxation in the Gabelli School of Business. His areas of interest include insider trading, earnings management, and the effects of tax law on taxpayer behavior.

The latter is the topic in which Veliotis is especially interested. For example, he co-wrote “Is There a December Effect? Strategic Prepayments of Deductible State Tax Payments” for The Journal of the American Taxation Association in 2010 with Fordham accounting professor John Shon, Ph.D.

The paper explored a tax strategy familiar to many taxpayers. Because the IRS allows taxpayers to deduct charitable donations and state taxes, it behooves taxpayers to make these payments before the end of December, so they can claim the deduction for that year.

Advisers recommend this strategy, but because taxpayers’ records are not publicly available, researchers have little way of knowing to what extent this planning actually is implemented.

Veliotis saw a way forward. “I found monthly tax income on about 35 states’ websites thanks to public disclosure laws that require states to tell taxpayers about their finances,” he said.

“We focused on month-by-month reports on how much came in from quarterly state tax payments. The last quarterly payment is due Jan. 15. But we noticed a big pop in December, which is evidence that people are prepaying—that they are indeed taking tax planning into account.”

In addition, Veliotis has tackled the idea of raising federal taxes during trying budgetary times. In “Proposal: Compulsory Bond Purchase as Compromise to Income Tax Rate Increase,” which he co-wrote with Fordham MBA student Kristen Gray for the DePaul Business & Commercial Law Journal in 2009, he conceded that higher taxes are difficult to implement. The trick, he said, is to make them more palatable.

“Nobody wants to pay taxes, but what if we tell people, ‘OK, you’re going to pay more this April, but you’re not really paying it, because we’re going to give you a bond, and we’ll pay you back later when the budget situation improves?’” he said.

He noted that when President Ronald Reagan dramatically lowered tax rates, taxpayers who paid higher rates earlier did not have the difference rebated to them.

“If a successful executive retired the year Reagan lowered rates and was paying tax at up to 70 percent for his whole career, and all of a sudden he has little income to tax, he doesn’t get the benefit of the lower rate. Our proposal makes taxes smoother over a lifetime, so that people who get hit hard with taxes in high-income years will get it back when budgets improve,” he said. “We’re heavily taxed, but we have to do something to bring in cash flow and this would be a good compromise.”

Veliotis also addresses insider trading. “Rule 10b5-1 Trading Plans and Insiders’ Incentive to Represent,” which was published in the American Business Law Journal in 2010, explains how a corporate executive could abuse a rule designed to clarify when a person could be accused of illegal insider trading, which is defined as acting on information not available to the public.

Approved in 2000 by the Securities and Exchange Commission, Rule 10b5-1 protects people who commit far in advance to sell their stock at a certain time. Without this rule, many insiders were accused of selling at opportune times and thus possibly taking advantage of inside information.

Veliotis noticed that many courts extended this rule beyond its intent.

In securities fraud cases, to hold an executive liable, there must be evidence of fraudulent intent (so- called “scienter”). This frequently has been shown by demonstrating that the executive sold stock at an opportune time related to the alleged fraud. The courts have typically extended the 10b5-1 plans, only applicable to showing an insider did not sell with the benefit of inside information, to also protect in the scienter analysis.

Veliotis points out the flaw in this logic. Just as the seller of a condominium has a financial interest in hiding asbestos from a buyer the day of the closing, so do corporate executives have an interest in making their companies look good—via tools like earnings management—before the pre-planned sales of their own stock take place.

“Maybe an executive had innocent motives when they committed to the sale, but that doesn’t mean they weren’t hiding anything negative about the company as the sale date drew nearer,” he said. “It doesn’t mean that they don’twant to hide the asbestos the day of the closing.”

Veliotis and Shon are pursuing this line of research in a new paper that will corroborate their idea with empirical evidence. When it comes to earnings management, for instance, he notes that there is a trend on Wall Street of companies just barely beating their analyst’s forecasts of their earnings.

“If you barely miss the forecast, they punish you on Wall Street, but if you barely pass it, they reward you. Research has shown a large kink in terms of the patterns of earnings announcements barely beating versus barely missing forecasts, especially where the executives have incentive to beat forecasts,” he said.

He is also moving forward with empirical studies that will further substantiate December effects. For example, is there hard data available that point to a jump in donations in December?

“Basically a lot of research in this area is just trying to be a good sleuth,” he said. “The problem is often not complicated; half the battle is just getting the data.”