TaxProf Blog

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

Wednesday, February 5, 2014

Hines Presents Delegating Tax Today at Duke

Hines 3James R. Hines, Jr. (Michigan) presents Delegating Tax (with Kyle D. Logue (Michigan) at Duke today as part of its Tax Policy Seminar hosted by Lawrence Zelenak:

Congress delegates extensive and growing lawmaking authority to federal administrative agencies in areas other than taxation, but tightly limits the scope of IRS and Treasury regulatory discretion in the tax area, specifically not permitting these agencies to select or adjust tax rates. This Article questions why tax policy does and should differ from other policy areas in this respect, noting some of the potential policy benefits of delegation. Greater delegation of tax lawmaking authority would permit policies to benefit from the expertise of administrative agencies, and afford timely adjustment to changing economic circumstances. Furthermore, delegation of the tax reform process to an independent commission or agency offers the prospect of Congress commiting itself to rational reform and long-run budget sustainability in a way that is more apt to succeed than are piecemeal legislative efforts. The Article concludes with an analysis of the constitutionality of tax delegation, noting the applicability of recent Supreme Court interpretations that Congress has broad discretion to delegate rulemaking authority to federal agencies, and that tax policy is of a kind with other federal policies.

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1. I suppose Congress could delegate the drafting process to a commission or even to a private company, so long as it voted on the ultimate result. And Congress chooses its own rules, so it choose not to route the bill though a committee. Otherwise, tho, isn't the Hines idea taxation without representation?

2. How about privatizing the *executive* function of taxation? Google would do a great job of the Big Data task of choosing audit rates, and H and R Block would be good at writing and administering forms. The legal jobs could be contracted out too. Administrative appeals could be kept in-house. Contractors who did bad audits would lose their jobs, unlike in-house auditors. And it would be easier, not harder, to keep politics out of tax collection if we kept the Chief Counsel out of the loop.

Posted by: Eric Rasmusen | Feb 5, 2014 12:38:01 PM

Giving more power to the IRS is a horrible idea. The IRS has shown many times that it is inept and corrupt. The opposite should be done- more oversight of the IRS by the WhiteHouse and Congress.
My own experiences over 30 years indicate that there is no reason at all to think IRS personnel have some command over tax knowledge.

Posted by: Albert Simmons, CPA | Feb 7, 2014 8:30:54 AM