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Tax Now Or Tax Never: Political Optionality And The Case For Current-Assessment Tax Reform, David Gamage, John R. Brooks

Georgetown Law Faculty Publications and Other Works

The U.S. income tax is broken. Due to the realization doctrine and taxpayers’ consequent ability to defer taxation of gains, taxpayers can easily minimize or avoid the taxation of investment income, a failure that is amplified many times over when considering the ultra-wealthy. As a result, this small group of taxpayers commands an enormous share of national wealth yet pays paltry taxes relative to the economic income their wealth produces—a predicament that this Article condemns as being economically, politically, and socially harmful.

The realization doctrine is widely justified as an accommodation made for administrative convenience. Although there have been numerous …