Tax Elections: How to Live with Them If We Can't Live Without Them

Emily Cauble

DePaul University - College of Law

April 30, 2013

Santa Clara Law Review, Vol. 53, 2013

Tax elections are prevalent. They include: elections that determine how certain business entities are classified; elections by individual taxpayers to either claim the standard deduction or itemize deductions; an election that determines the tax treatment of alimony payments; an election by divorced parents to determine which parent claims a child as a dependent; and elections that affect the tax consequences of certain corporate transactions; just to name a few.

Tax elections produce unfairness given that sophisticated, well-advised taxpayers will be most able to make favorable elections. Tax law is, by no means, alone in terms of benefiting sophisticated individuals. In many areas of law and of life, people who acquire relevant information and plan ahead of time will fare better than those who do not. However, despite the prevalence of societal advantages for the informed, the existence of such preferences in tax law is especially problematic. Objections to the advantages that are bestowed upon sophisticated individuals by other areas of law are often met with the response that redistribution should be relegated to the tax system. For example, those arguing for rules that facilitate economically efficient outcomes in contractual relationships will often contend that the manner in which the benefit of a contract is divided between the parties need not be addressed by contract law because any desired redistribution should be accomplished through the tax system. Because other areas of law dodge criticisms of bias against unsophisticated individuals in this manner, tax law must be less tolerant of bias against ill-informed, unsophisticated individuals. To further the aim of reducing such bias, this paper discusses how to design tax elections to mitigate the unfairness and other harms that they cause.

Number of Pages in PDF File: 58

Keywords: tax elections

Open PDF in Browser Download This Paper

Date posted: May 2, 2013  

Suggested Citation

Cauble, Emily, Tax Elections: How to Live with Them If We Can't Live Without Them (April 30, 2013). Santa Clara Law Review, Vol. 53, 2013. Available at SSRN: https://ssrn.com/abstract=2258803

Contact Information

Emily Cauble (Contact Author)
DePaul University - College of Law ( email )
25 E. Jackson Blvd.
Chicago, IL Cook County 60604-2287
United States

Feedback to SSRN

Paper statistics
Abstract Views: 613
Downloads: 94
Download Rank: 220,932