Category Archives: Taxation

New Article: “Fines, Fees, and Forfeitures”

Beth A. Colgan, Fines, Fees, and Forfeitures, SSRN, August 15, 2107.  Abstract below:

The use of fines, fees, and forfeitures has expanded significantly in recent years as lawmakers have sought to fund criminal justice systems without raising taxes. Concerns are growing, however, that inadequately designed systems for the use of such economic sanctions have problematic policy outcomes, such as the distortion of criminal justice priorities, exacerbation of financial vulnerability of people living at or near poverty, increased crime, jail overcrowding, and even decreased revenue. In addition, the imposition and collections of fines, fees, and forfeitures in many jurisdictions are arguably unconstitutional, and therefore create the risk of often costly litigation. This chapter provides an overview of those policy and constitutional problems and provides several concrete solutions for reforming the use of fines, fees, and forfeitures.



Op-Ed: “The biggest beneficiaries of the government safety net: Working-class whites”

Tracy Jan, The biggest beneficiaries of the government safety net: Working-class whites, Washington Post, February 16, 2017. [Commentary on the true effect of the government assistance and tax credit programs of 2014.]

Op-Ed: “Louise Linton and the “Sacrifices” of the Very Rich and Incredibly Obnoxious”

Op-Ed: Ezra Rosser, Louise Linton and the “Sacrifices” of the Very Rich and Incredibly Obnoxious, CommonDreams, Aug. 23, 2017. [Sadly, I was in a rush to pick up my kid from camp and did not read it through a second time before I pressed send–I missed a couple of grammar issues, but oh well.]

New Article: “Taxing Wealth Seriously”

New Article: Edward J. McCaffery, Taxing Wealth Seriously, 70 Tax L. Rev. 305 (2017). Abstract below:

The social and political problems of wealth inequality in America are severe and getting worse. A surprise is that the U.S. tax system, as is, is a significant cause of these problems, not a cure for them. The tax-law doctrines that allow those who already have financial wealth to live, luxuriously and tax-free, or to pass on their wealth tax-free to heirs, are simple. The applicable legal doctrines have been in place for nearly a century under the income tax, the primary social tool for addressing matters of economic inequality. The analytic pathways to reform are easy to see once the law is properly understood. Yet our political systems show no serious interest in taxing wealth seriously. We are letting capital off the hook, and ratcheting up taxes on labor, at precisely a time when deep-seated and long-running economic forces suggest that this is precisely the wrong thing to do. It is time — past time — for a change. This Article canvasses a century of tax policy in the United States to show that we have never been serious about taxing wealth seriously, and to lay out pathways towards reform.

New Article: “Poor Support/Rich Support: (Re)Viewing the American Social Welfare State”

New Article: Wendy A. Bach, Poor Support/Rich Support: (Re)Viewing the American Social Welfare State, forthcoming Florida Tax Rev. 2017.  Abstract below:

Since at least the 1970s a variety of scholars have redefined the U.S. social welfare state to include not only traditional benefit programs (for example Food Stamps and social security) but also a variety of tax benefits that are “hidden” or “submerged” forms of “welfare for the wealthy.” Including these benefits in the overall picture of U.S. social welfare provision reveals a system that is both larger in size than popularly believed and that, in addition to providing some support for the poor, distributes significant benefits regressively, to households with substantial wealth. Although a variety of scholars and policy analysts have described these outcomes, scholars have yet to focus on the ways in which structural inequality is written directly into the means of administration of U.S. social welfare programs. This article is the first to turn to those questions and to systematically demonstrate that those who are economically (and disproportionately racially) disadvantaged are offered a social welfare state that is meager, punitive and tremendously risky for those who receive its benefits. But for those with economic privilege, the story is quite different. Families and individuals with significant economic privilege benefit disproportionately from a whole host of cash and near-cash benefits that are neither meager nor punitive. In fact, in contrast to benefits for the poor, benefits for the rich function as nearly invisible entitlements. As one moves from benefits for the poor towards benefits for the rich the administrative structures shift along this progression, becoming less and less punitive and risky and more and more like invisible entitlements. Although as a formal matter the rich, like the poor, have no right to economic support in the Constitutional sense, American social welfare policy moves the rich remarkably close to a right to economic support, leaving the poor far behind. This article reveals these vast structural inequalities and concludes by calling not only, as others have, for an increase and more progressive distribution of social welfare dollars but also, for the first time, for reforms that would address the structural inequalities at the heart of the U.S. social welfare state and that would render it more successful at supporting the autonomy and resilience of all of its beneficiaries.

News Coverage: “How Homeownership Became the Engine of American Inequality”

News Coverage: Matthew Desmond, How Homeownership Became the Engine of American Inequality, N.Y. Times Magazine, May 9, 2017.

New Article: “Do Court Mandates Change the Distribution of Taxes and Spending? Evidence from School Finance Litigation”

New Article: Zachary D. Liscow, Do Court Mandates Change the Distribution of Taxes and Spending? Evidence from School Finance Litigation, Journal of Empirical Legal Studies (Forthcoming).  Abstract below:

Little is known about whether court mandates ultimately affect the distribution of taxes and spending or whether legislatures offset the distributional consequences of those court orders with other changes. To offer insight into this question, I use an event-study methodology to show how state revenues and expenditures respond to court orders to increase funding for schools for low-income students. The court orders are financed almost entirely through increases in taxes, and there is little evidence of offsetting behavior by the legislature. State income tax changes are broad-based across the income distribution and do not target tax filers with children. Thus, since the main beneficiaries of the school spending do not pay a disproportionate share of the costs, advocates for school finance reform are effective at transferring resources to poor families. The results suggest that welfare analysis of these legal rules should take into account not only efficiency but also distribution.

Article: Should the Law Do Anything About Economic Inequality?

Article: Matthew Dimick, Should the Law Do Anything About Economic Inequality?, SUNY Buffalo Legal Studies Research Paper No. 2016-011 (2016).

What should be done about rising income and wealth inequality? Should the design and adoption of legal rules take into account their effects on the distribution of income and wealth? Or should the tax-and-transfer system be the exclusive means to address concerns about inequality? A widely-held view argues for the latter: only the tax system, and not the legal system, should be used to redistribute income. While this argument comes in a variety of normative arguments and has support across the political spectrum, there is also a well-known law-and-economics version. This argument, known as the “double-distortion” argument, is simply stated. Legal rules that redistribute income only add to the economic distortions that are already present in the tax system. It would therefore be better for everyone, and especially the poor, to instead adopt an efficient, nonredistributive legal rule, and increase redistribution through the tax system.

This Article challenges the double-distortion argument from a law-and-economics perspective. There are two main arguments, in addition to several other subsidiary points. First, in the abstract, there is no reason to believe that legal rules that have redistributive effects will always reduce efficiency; indeed, they can sometimes increase efficiency. Examples from the regulation of product markets, labor markets, and financial markets underscore this claim. In these cases, legal redistribution is more efficient than redistribution through the tax system. Second, legal rules are likely to be more attractive than taxation precisely in cases where inequality itself or normative concerns about inequality is high. Under the optimal tax policy, higher inequality or greater concern about inequality will justify larger tax distortions. Therefore, a particular legal rule is more likely to be more efficient than the optimal tax policy under these circumstances. The ultimate conclusion is that a mix of legal rules and taxation, rather than taxation exclusively, will be the best way to address economic inequality.

Article: The Mapmaker’s Dilemma in Evaluating High-End Inequality

Article:  Daniel Shaviro, The Mapmaker’s Dilemma in Evaluating High-End Inequality, New York University Public Law and Legal Theory Working Papers (2016).

The last thirty years have witnessed rising income and wealth concentration among the top 0.1 percent of the population, leading to intense political debate regarding how, if at all, policymakers should respond. Often, this debate emphasizes the tools of public economics, and in particular optimal income taxation. However, while these tools can help us in evaluating the issues raised by high-end inequality, their extreme reductionism – which, in other settings, often offers significant analytic payoffs – here proves to have serious drawbacks. This paper addresses what we do and don’t learn from the optimal income tax literature regarding high-end inequality, and what other inputs might be needed to help one evaluate the relevant issues.

News Article: Supply-Side Economics, but for Liberals

News Article: Neil Irwin, Supply-Side Economics, but for Liberals, N.Y. Times (Apr. 15, 2017).