Sharp Lines and Sliding Scales in Tax Law

68 Pages Posted: 13 Mar 2019 Last revised: 26 Nov 2019

See all articles by Edward G. Fox

Edward G. Fox

University of Michigan Law School

Jacob Goldin

Stanford Law School

Date Written: November 18, 2019

Abstract

The law is full of sharp lines, where small changes in one’s circumstances lead to significant changes in legal treatment. In many cases, a sharp line can be smoothed out by replacing it with a sliding scale. Under a sliding scale, small changes in one’s circumstances lead to small changes in legal treatment. In this paper, we study the policy choice between sharp lines and sliding scales in tax law. We focus on considerations relating to efficiency, complexity, administration, tax planning, and the objectives of specific provisions. Although sharp lines are currently widespread in tax law, we argue that sliding scales are frequently feasible in practice and can often better serve a range of tax policy goals. We illustrate our claims with examples drawn from diverse areas of tax law.

Suggested Citation

Fox, Edward G. and Goldin, Jacob, Sharp Lines and Sliding Scales in Tax Law (November 18, 2019). Stanford Law and Economics Olin Working Paper No. 534, Available at SSRN: https://ssrn.com/abstract=3339656 or http://dx.doi.org/10.2139/ssrn.3339656

Edward G. Fox

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States

Jacob Goldin (Contact Author)

Stanford Law School ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

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