TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, October 22, 2012

Raskolnikov Presents The Limits of Tax Law and Economics Today at Loyola-L.A.

RaskolnikovAlex Raskolnikov (Columbia) presents Accepting the Limits of Tax Law and Economics at Loyola-L.A. today as part of its Tax Policy Colloquium Series:

This Article explores the limits of tax law and economics. The inquiry is comparative. The Article argues that outside of the tax context two pivotal insights account for the general success of law and economics in explaining and possibly shaping the law. First, accepting just a few fairly simple and plausible assumptions yields clear, intuitive, powerful and widely applicable policy prescriptions. Second, the normative strand of law and economics benefits greatly from a substantial similarity between several theoretically optimal legal regimes and the corresponding actual systems of rules and sanctions. Neither insight applies in the tax setting because the tax optimization problem is uniquely complex. The optimal tax system must account for the impossibility of deterring socially undesirable behavior, provide for redistribution, and accomplish all of that on the basis of assumptions that are laden with deeply contested value judgments, pervasive empirical uncertainty, or both. Given these challenges, it is hardly surprising that the welfarist theory has a much weaker connection to the content of our tax laws and their enforcement than it does to the content and enforcement of many other legal regimes. This weakness has a profound effect on the debates about the fundamental features of our tax system. It affects many familiar arguments about anti-avoidance rules and sanctions. And it extends to evaluating outright tax evasion. In sum, every aspect of tax policy is affected by the limits of tax law and economics. At the same time, accepting these limits shifts focus to several broad research agendas where tax law and economics will continue to yield invaluable contributions to the project of improving our tax system.

Carlos Berdejo (Loyola-LA) and Nancy Staudt (USC) are the commenters.

Colloquia, Scholarship, Tax | Permalink

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Couldn't agree more re: tax, but I'm also dountful that economics offers any "clear, intuitive, powerful and widely applicable policy prescriptions" not previously available from philosophy, literature, history, etc. A lot of economists still lean utilitarian, it seems, having never absorbed Bernard Williams' or Solzhenitsyn's lethal critiques. I'd rather re-read Arthur Leff's Unspeakable Ethics, Unnatural Law than re-take my Law & Economics class.

Posted by: Yo Gabba Gabba | Oct 25, 2012 11:01:24 AM