TaxProf Blog

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

Monday, September 24, 2012

Cauble Presents Tax Elections Today at Loyola-L.A.

CaubleEmily Cauble (Michigan State) presents Tax Elections: How to Live With Them If We Can't Live Without Them at Loyola-L.A. today as part of its Tax Policy Colloquium Series:

Tax elections are prevalent. They include: elections that determine how certain business entities are classified; elections by individual taxpayers to either claim the standard deduction or itemize deductions; an election that determines the tax treatment of alimony payments; an election by divorced parents to determine which parent claims a child as a dependent; and elections that affect the tax consequences of certain corporate transactions; just to name a few.

Tax elections produce unfairness given that sophisticated, well-advised taxpayers will be most able to make favorable elections. Tax law is, by no means, alone in terms of benefiting sophisticated individuals. In many areas of law and of life, people who acquire relevant information and plan ahead of time will fare better than those who do not. However, despite the prevalence of societal advantages for the informed, the existence of such preferences in tax law is especially problematic. Objections to the advantages that are bestowed upon sophisticated individuals by other areas of law are often met with the response that redistribution should be relegated to the tax system. For example, those arguing for rules that facilitate economically efficient outcomes in contractual relationships will often contend that the manner in which the benefit of a contract is divided between the parties need not be addressed by contract law because any desired redistribution should be accomplished through the tax system. Because other areas of law dodge criticisms of bias against unsophisticated individuals in this manner, tax law must be less tolerant of bias against ill-informed, unsophisticated individuals. To further the aim of reducing such bias, this paper discusses how to design tax elections to mitigate the unfairness and other harms that they cause.

Heather M. Field (UC-Hastings) is the commenter.

Colloquia, Scholarship, Tax | Permalink

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Sounds interesting. Prof. Cauble is incredibly sharp; so this presentation wont disappoint. I wonder if her paper discusses status quo biases and efficient default rules. Tax scholarship could use a larger dose of behavioral psychology.

Posted by: HTA | Sep 26, 2012 6:16:20 AM