Location, Location, Location: Using Cost of Living to Achieve Tax Equity

34 Pages Posted: 11 Mar 2012 Last revised: 28 Mar 2012

See all articles by James M. Puckett

James M. Puckett

The Pennsylvania State University (University Park) – Penn State Law

Date Written: March 7, 2012

Abstract

All other things being equal, the federal income tax ignores whether the taxpayer lives in a relatively affordable or expensive location. This approach can lead to unfairness; moreover, special deductions for the taxpayer’s actual living expenses, such as home mortgage interest and state and local taxes, do not solve the problem. Tax law scholars have generally been quick to dismiss the equity issues based on assumptions about taxpayer mobility. The existing literature would tax comparable workers equally, regardless of salary and living costs. This approach would unfairly equate differently situated workers. This Article questions the assumption of taxpayer mobility, considers the equity issues associated with failure to index the tax system properly, and assesses potential solutions.

Keywords: location, cost of living, local cost of living, progressivity, tax equity, mobility

Suggested Citation

Puckett, James M., Location, Location, Location: Using Cost of Living to Achieve Tax Equity (March 7, 2012). Alabama Law Review, Vol. 63, No. 3, p. 591, Seattle University School of Law Research Paper No. 12-15, Available at SSRN: https://ssrn.com/abstract=2019912

James M. Puckett (Contact Author)

The Pennsylvania State University (University Park) – Penn State Law ( email )

Lewis Katz Building
University Park, PA 16802
United States

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