Sharp Lines and Sliding Scales in Tax Law

56 Pages Posted: 13 Mar 2019 Last revised: 10 Apr 2019

See all articles by Edward G. Fox

Edward G. Fox

University of Michigan Law School

Jacob Goldin

Stanford Law School

Date Written: February 20, 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, focusing particularly on concerns related to efficiency, complexity, and administration. Sharp lines are dominant in tax law, especially for classifications that depend on factors other income. We argue that this dominance is unwarranted; sliding scales are often feasible in practice and better serve a variety 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 (February 20, 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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