63 Pages Posted: 26 Jan 2006 Last revised: 2 May 2014
Date Written: August 1, 2005
This Article reexamines some fundamental tax policy concepts through the analysis of commuting expenses.
It challenges the well-entrenched distinction between personal and business expenses. This distinction, I argue, conceals fundamental normative choices that should be openly discussed. Indeed, this Article suggests that resorting to the substantive grounds for the allowance of certain expenses explicitly is normatively superior to using the seemingly technical personal-business distinction. Furthermore, such a strategy provides a more workable doctrinal framework.
In its search for appropriate substantive foundations, the Article draws not only on the conventional considerations of efficiency and distributive justice, but also on considerations that are novel to tax policy - identity and community.
This Article uses commuting expenses as a case study. A critical examination of tax law's disallowance of commuting expenses demonstrates the futility of the business-personal distinction. In its stead, the Article analyzes the economic efficiency of allowing a deduction for commuting expenses; it uses the vast empirical literature on commuting to demonstrate the significant distributive questions involved; and it highlights the importance of community and identity considerations to the discourse of deductions in general and of commuting expenses in particular.
Finally, this Article suggests a mechanism that would properly address the distributive and efficiency concerns while fully tackling identity and community issues.
Keywords: Commuting, Deductions, Tax Policy, Business-Personal Distinction
JEL Classification: K34, H24
Suggested Citation: Suggested Citation