Tuesday, May 12, 2020
David Gamage (Indiana) & Darien Shanske (UC-Davis), Tax Cannibalization and Fiscal Federalism in the United States, 111 Nw. U. L. Rev. 295 (2017):
We began this project pondering a riddle. Most state governments have adopted what we—and many others—view as clearly suboptimal tax policies, especially in regard to the taxation of corporate income and capital gains. Yet, with the notable exception of those who oppose progressivity and the taxation of capital, state-level tax policymakers have had remarkably little appetite for reform. This Article provides one major explanation for this riddle by identifying and demonstrating a phenomenon that we label as “tax cannibalization.” We argue that flawed state-level tax policies derive in part from perverse incentives inadvertently created by the federal government.
David Gamage (Indiana) & Darien Shanske (UC-Davis), Tax Cannibalization by State Corporate Taxes: Revised Estimates, 95 State Tax Notes 487 (Feb. 10, 2020):
This essay reports revised estimates for the tax cannibalization problem with respect to U.S. state-level corporate income taxes. The essay concludes that, although the tax cannibalization generated by state corporate income taxes has been substantially reduced since 2017, the magnitude of the current problem as reflected in the revised 2020 estimates is still rather large and striking.
David Gamage (Indiana) & Darien Shanske (UC-Davis), Tax Cannibalization by State Corporate Taxes: Policy Implications, 95 State Tax Notes 565 (Feb. 17, 2020):
This essay clarifies a point of possible confusion about the tax cannibalization problem and discusses some policy implications for both U.S. state governments and the U.S. federal government in 2020.