Law Quadrangle (formerly Law Quad Notes)


In this article, Professors Kahn and Lehman argue that the concept of tax expenditures is flawed as a tool for measuring the propriety of tax provisions. It assumes the existence of one true and correct standard of dederal income taxation that applies to all circumstances. To make that assumption, the proponents of the concept implicitly make a particular moral claim about the relative importance of a wide range of values, including efficiency, consumption/savings neutrality, privacy, distributional equity, administrability, charity, and pragmatism. They then measure a tax provision's "normalcy"exclusively by how it conforms to their Platonic concept of income.

Professors Kahn and Lehman maintain that there is not single ideal concept of income. Instead, there are a number of plausible candidates, the choice among which constitutes a contestable, political decision. The tax expenditure budgets create and illusion of value-free scientific precision in a world where it is neither possible nor desirable to ignore the range of societal values that speak to how an icome tax code is structured. The authors believe that the tax expenditure concept distorts public debate over tax provisions.