Will Tax Reform Be Stable?

63 Pages Posted: 4 Sep 2015 Last revised: 25 Apr 2017

See all articles by Jason Oh

Jason Oh

University of California, Los Angeles (UCLA) - School of Law


Stability is essential to any reform’s success, yet it is hardly guaranteed. This is particularly true in tax policy, where Congress persistently tinkers. This Article offers a novel approach to studying the stability of reform proposals in taxation. Any reform proposal can be decomposed into its constituent policies. I show that politically extreme policies are more likely to be reversed than are moderate ones. This basic intuition allows one to decompose any tax reform proposal into stable and unstable pieces.

Stability analysis has important implications for tax reform, potentially upending normative prescriptions. First, reform is often justified by appeals to efficiency and fairness. These claims must be appropriately discounted for instability. I demonstrate that some “efficient” or “fair” reforms can be quite inefficient or unfair due to their inherent instability. Second, the overall revenue effect of a proposal depends on its stability. Many so‐called “revenue‐neutral” proposals may actually reduce revenue once stability is incorporated into the analysis. Such reforms are particularly troubling today given the growing federal deficit.

Keywords: Reform Stability, Tax Reform, Legislative Uncertainty, Political Uncertainty, Empirical Legal Methods, Tax Policy

Suggested Citation

Oh, Jason, Will Tax Reform Be Stable?. 165 University of Pennsylvania Law Review 1159 (2017); UCLA School of Law, Law-Econ Research Paper No. 15-16. Available at SSRN: https://ssrn.com/abstract=2655362

Jason Oh (Contact Author)

University of California, Los Angeles (UCLA) - School of Law ( email )

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States

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