Thursday, March 21, 2019
Edward Fox (Michigan) presents Sharp Lines And Sliding Scales In Tax Law (with Jacob Goldin (Stanford)) at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:
The law is full of sharp lines, where small changes in one’s circumstances lead to significant changes in legal treatment. In many cases, a sharp line can be smoothed out by replacing it with a sliding scale. Under a sliding scale, small changes in one’s circumstances lead to small changes in legal treatment. In this paper, we study the policy choice between sharp lines and sliding scales in tax law, focusing particularly on concerns related to efficiency, complexity, and administration. Sharp lines are dominant in tax law, especially for classifications that depend on factors other income. We argue that this dominance is unwarranted; sliding scales are often feasible in practice and better serve a variety of tax policy goals. We illustrate our claims with examples drawn from diverse areas of tax law.