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69 Hastings L.J. 1 (2017-2018)

handle is hein.journals/hastlj69 and id is 1 raw text is: 


                 Kaplow and Shavell and the

      Priority of Income Taxation and Transfer


This Article rejects a central claim of taxation and private law theory, namely,
Kaplow   and  Shavell's prominent  thesis that egalitarian social goals are most
efficiently achieved through income taxation and transfer, as opposed to egalitarian
alterations in private law rules. Kaplow and Shavell compare the efficiency of rules of
tort to rules of tax and transfer in meeting egalitarian goals, concluding that taxation
and transfer is always more efficient than other private law legal rules. We argue that
Kaplow  and  Shavell reach this conclusion only through inattention to the body of
private law  that informs the very basis of their discussion: underlying property
entitlements. This Article contends that Kaplow and Shavell's comparison of rules of
taxation to rules of tort fails to take proper account of the powerful  role that
(re)assigning underlying property entitlements plays in achieving egalitarian goals,
even at the level offormal theory. We conclude that, contrary to Kaplow and Shavell's
prominent  claim, as a matter of efficiency, the rules of income taxation and transfer
are  not always  preferable to alterations in the initial assignment of property
entitlements in achieving distributive or egalitarian goals.

     * Associate Professor of Law, Michigan State University College of Law; Affiliated
Transnational Professor, Peking University School of Transnational Law.
    ** Professor of Law, University of Virginia School of Law. For helpful comments and discussions
we are grateful to Daniel D. Barnhizer, John G. Bennett, Anthony M. Candido, Kevin E. Collins, James
M. Chen, Gerrit De Geest, Robert C. Ellickson, John C. Harrison, Heather Hughes, Pauline Kim,
Anthony T. Kronman, Jeffrey S. Lehman, Julia D. Mahoney, Adam Mossoff, Eric A. Posner, Glen
Staszewski, Maxwell L. Steams and Adam Rosenzweig and to workshop participants at American
University, Hong Kong University, the University of Maryland, Washington University in St. Louis and
the University of Virginia schools of law and at the Centre for Applied Philosophy and Public Ethics at
Australian National University.


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