Thursday, July 18, 2019
Christine Manolakas (McGeorge), The Tax Law and Policy of Natural Disasters, 71 Baylor Law Rev. 1 (2019):
Natural disasters result in untold human suffering and economic loss. In addition to possible physical injury and loss of life, the futures of the individuals involved are forever altered. Homes and neighborhoods are destroyed, families and communities are dislocated, and jobs and businesses are jeopardized. Unconscionably, Tax Cuts and Jobs Act of 2017 further diminished the already inadequate tax relief available for the damage or destruction of personal-use property caused by casualty events. Following a general discussion of the tax laws applicable to casualty losses, including changes made by the Tax Cuts and Jobs Act of 2017, this article surveys the permanent tax relief provisions available to the victims of all natural disasters and the additional permanent tax relief provisions available only to the victims of Federally declared disasters.
Examined and compared is the action taken by Congress and the Treasury Department, extending even greater tax relief and incentives to the victims of selected Federally declared disasters. Although the victims of natural disasters feel the devastation equally, widespread media coverage and political considerations often result in greater levels of tax relief to victims of higher-profile natural disasters. The American public expects the federal government to provide relief to the victims of all natural disasters and is unaware the federal government, through its tax laws, treats the victims of certain natural disasters more favorably, depending often on the extent of the media coverage and the political importance of a particular casualty event.