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Full-Text Articles in Law
Inflation, Market Failures, And Algorithms, Rory Van Loo
Inflation, Market Failures, And Algorithms, Rory Van Loo
Faculty Scholarship
Inflation is a problem of tremendous scale. But inflation itself is unlikely to cause the greatest economic harm during inflationary periods. Instead, a more likely source of devastation will be policymakers’ response to inflation. Their main anti-inflation tools, most notably increasing interest rates, increase unemployment and the risk of recessions. This Article argues that there is a better approach. Rather than defaulting to interest rate hikes that harm markets, policy makers should prioritize laws that lower prices while improving markets. For decades, businesses have raised prices by manipulating consumers, exercising monopoly power, and lobbying for laws that block competition. Automated …
Silent Tax Changes: The Political Economy Of Indexing For Inflation, Alan L. Feld
Silent Tax Changes: The Political Economy Of Indexing For Inflation, Alan L. Feld
Faculty Scholarship
The federal income tax adjusts many but not all of its dollar components automatically to account for inflation. In this article I analyze the benefits and burdens this process confers on some taxpayers and the political logic behind them. I discuss the choice of the proper index for making the adjustments, as well as the effects of the failure to adjust specific dollar amounts. I conclude that some adjustments have become overly generous, while unadjusted provisions suffer slow repeal, sometimes intentionally. Indexation thus can have the effect of tax legislation by stealth.