Darien Shanske (UC-Davis; Google Scholar), Michael Mazerov (Center on Budget and Policy Priorities), Dan Bucks (Multistate Tax Commission), Peter Enrich (Northeastern) & Carl Davis (Institute on Taxation and Economic Policy), Incidence Is Not Incidental: A First Response to COST's Flawed Critique of the Pursuit of Progressive State Tax Policy, 114 Tax Notes St. 173 (Oct. 21, 2024):
SALT in the Public Interest presents government and academic perspectives on state and local tax issues in a roundtable discussion format featuring former Multistate Tax Commission Executive Director Dan R. Bucks; Peter D. Enrich, professor emeritus at the Northeastern University School of Law; Michael Mazerov, who recently retired from the Center on Budget and Policy Priorities; and professor Darien Shanske of the University of California, Davis, School of Law (King Hall). This column also features guest commentator Carl Davis, research director for the Institute on Taxation and Economic Policy. Tax Notes State senior editor Doug Sheppard moderates the discussion.
In this installment, the authors respond to a recent article by Karl Frieden of the Council On State Taxation [Wearing Blinders in the Debate Over Business’s ‘Fair Share’ of State Taxes, 112 State Tax Notes 91 (Apr. 8, 2024)], arguing that it attributes a position to them that they’ve never taken and is fundamentally flawed because it evaluates tax fairness without considering incidence.
We had discussed among ourselves our intention to write an in-depth response to the article that Karl Frieden published in Tax Notes State in April, which took issue in a fundamental way with the entire body of our discussions over the last five years. Unfortunately, we haven’t yet gotten around to that. I hope we will. It’s a 30-page article and there is so, so much that we could say in response to it. But given the fact that we have not yet found time for a comprehensive response, we agreed that we did not want to have that article sitting out there entirely unanswered. So, that’s what we’ve decided to focus on today.
When progressives or liberals — people who generally support active government — talk about increasing business taxes or talk about the share of taxes that businesses pay, one of the first responses of business representatives to that kind of discussion is pointing out that businesses don’t pay taxes; people pay taxes. People pay business taxes in their capacity as workers, consumers, or business owners. For me, one of the most striking aspects of the Frieden article is that in a 30-page article that purports to be a big picture discussion of whether businesses are paying their fair share of state and local taxes, the only place that the word “incidence” appears is in a citation in a footnote to an article that happens to have the word “incidence” in its title.
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