Alex Raskolnikov (Columbia) presents Taxes and Tournaments, 2024 Mich. St. L. Rev. __: 

What is the best way to reduce economic inequality? Economists, lawyers, political philosophers and politicians have pondered this question for decades. Yet there is another group of savvy and highly motivated individuals who have been thinking about redistribution for just as long. Commissioners of the National Football League, the National Basketball Association, the National Hockey League, and Major League Baseball together with team owners and player unions have been inventing and reinventing ways to redistribute resources, and they continue to do so today. The same is true of the President of National Collegiate Athletic Association along with the heads of Big Ten, Big Twelve and other powerful athletic conferences. This Article asks what we can learn from their experiences.

The answer, it turns out, is that we can learn quite a bit. Key tax policy questions-whether it is better to have one tax base or many, whether non-tax rules should take distributional effects into account, whether it is better to redistribute in cash or in kind, whether redistribution should take place at the national or local level, and whether predistribution is superior to redistribution all arise in major sports competitions. Running sports tournaments, it turns out, has more than a little in common with running a tax-and-transfer system. And the general approach reflected in the design of real-world tax systems and professional sports tournaments turns out to be the same: adopt many plausible solutions instead of searching for a perfect one.

Lawrence Zelenak (Duke; Google Scholar) presents Moral Duty or “Mere Cant”? Tax Protesting Through the Looking Glass, 2024 Mich. St. L. Rev. __:

In a recent New York Times op-ed [You Don’t Have to Take Every Tax Deduction, and You Shouldn’t], Princeton University sociologist Matthew Desmond proposed an innovative form of tax protest—intentionally overpaying one’s federal income tax by choosing not to claim deductions and credits to which one is legally entitled, as a way of registering one’s policy objection to the unclaimed tax benefit. Although this tax protest technique could be used against a wide range of deductions and credits, Desmond’s op-ed paid particular attention to the home mortgage interest deduction, which he criticized as a “ridiculous deduction,” which serves as “primarily a windfall for the wealthy,” and the benefits of which disproportionately “flow to white households.” Although Desmond praises another taxpayer (Alejandro Narvaez, a Seattle dentist) who intentionally foregoes deductions to which he is entitled but to which he objects on policy grounds, Desmond explains that his own family has registered its objection in a different way—”by donating what we receive from the mortgage- interest deduction to affordable housing initiatives on top of our regular giving.” His bottom line: “I honestly don’t know if it’s better to donate tax deductions or, like Mr. Narvaez, refuse them outright. I only know that it feels unfair to keep it all for ourselves.” His hope is that, if enough Americans follow his lead—either by intentionally foregoing objectionable deductions, or by donating to charity the tax savings from objectionable deductions claimed—those taxpayers would “send Washington a clear message that they would support progressive tax reform by enacting such reforms in their own lives.” Although one might reasonably be skeptical of the prospects of persuading a meaningful number of Americans to renounce tax breaks to which they are legally entitled, of the six letters the Times published a few days later in response to Desmond’s op-ed, five supported one or both version of Desmond’s proposal.

In this essay I explore Desmond’s proposal from several angles. The question is whether there is a compelling case for Desmond’s proposed tax protest movement, or whether his claim that affluent taxpayers benefitting from various tax breaks have a moral duty to overpay their taxes by foregoing the tax breaks is, in Learned Hand’s words, “mere cant.” Part I of the essay situates the proposal in a long line of tax protest movements–mostly movements refusing to pay taxes legally owed, but also a few antecedents to Desmond’s protest-by overpayment. Part II considers whether there are any legal constraints on taxpayers intentionally overstating their own tax liabilities. It explains there are some constraints, but not enough to close off this avenue of protest. Part III offers several reasons why, even assuming legality and a taxpayer broadly in sympathy with Desmond’s views on social justice, a taxpayer might want to think twice (at least) before deciding to follow Desmond’s lead. The basic point is that, viewed in the context of the overall tax structure, few if any tax breaks are so clearly unfair that a taxpayer should feel morally compelled to forswear them, even if the taxpayer would happily support their repeal.

Update:  Michigan State Law Review Tax Law Symposium Schedule:

• Introductory Remarks:  Michael Sant'Ambrogio (Dean, Michigan State) and Charles Delmotte (Michigan State)
• Presentation:  Alex Raskolnikov (Columbia)
• Presentation:  Lawrence Zelenak (Duke)
• Closing Remarks:  David Blankfein-Tabachnick (Michigan State)

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