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

Thursday, September 26, 2013

Hickman Reviews Mason's Delegating Up: State Conformity with the Federal Tax Base

JotwellKristin E. Hickman (Minnesota), Recognizing and Rethinking Federal-State Tax-Base Conformity (Jotwell), reviewing Ruth Mason (Virginia), Delegating Up: State Conformity with the Federal Tax Base, 62 Duke L.J. 1267 (2013):

Tax policy ranks among the more heated issues in modern politics.  Politicians argue a lot about what rates to apply to which taxpayers, but the tax policy debate is not limited to tax rates.  It is strange, therefore, just how little state individual income tax regimes differ from their federal counterpart.  State tax laws tweak the federal model here and there around the edges, but in the main, all of the states that impose a broad-based income tax rely either explicitly or implicitly on federal tax laws to define their tax base.  In her thoughtful article, Delegating Up: State Conformity with the Federal Tax Base, Ruth Mason thoroughly documents and persuasively challenges federal and state lawmakers to think more carefully about the consequences of this phenomenon. ...

Mason proposes several incremental strategies at both the federal and state levels to ameliorate the disadvantages of federal-state tax conformity.  For example, she proposes that states increase public awareness by publishing annual tax expenditure budgets, reduce revenue volatility through static rather than dynamic incorporation of federal tax laws, or at least starting their tax liability calculations with federal adjusted gross income rather than federal taxable income.  She encourages Congress to pay more attention to the effect of federal tax law changes on states and to simply produce a list of changes each year to facilitate the ability of state lawmakers to adopt corresponding changes as needed.  Mason also calls for more consideration of the effects of federal-state tax-base conformity in ongoing debates over federal tax policy and for more research into the nature and scope of those effects.  Whether or not lawmakers and scholars heed her call, she has firmly established the case that they should.

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