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Sharp Lines And Sliding Scales In Tax Law, Edward Fox, Jacob Goldin

Articles

The law is full of sharp lines, where small changes in one’s circumstances lead to significant changes in legal treatment. In many cases, a sharp line can be smoothed out by replacing it with a sliding scale. Under a sliding scale, small changes in one’s circumstances lead to small changes in legal treatment. In this paper, we study the policy choice between sharp lines and sliding scales in tax law. We focus on considerations relating to efficiency, complexity, administration, tax planning, and the objectives of specific provisions. Although sharp lines are currently widespread in tax law, we argue that sliding …