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Changing Places, Changing Taxes: Exploiting Tax Discontinuities

  • Julie Roin
Published/Copyright: July 3, 2021
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Theoretical Inquiries in Law
From the journal Theoretical Inquiries in Law Volume 22 Issue 1

Abstract

President Trump’s decision to move his official state of residence from high-tax New York to no (income)-tax Florida has brought public attention to an issue that has long troubled scholars, designers and administrators of income tax systems: how the interaction of tax rules deferring the taxation of income and tax rules based on residency allows taxpayers to reduce and even avoid taxation of their deferred income. These discontinuities in tax treatment may lead to excessive migration, as well as reductions in state income tax revenues and distortions in the design of state taxing mechanisms. This Article explains what states would have to do to eliminate these avoidance opportunities. However, it also points out that many of these policy changes would create other tax discontinuities. Ultimately, it leaves open the question whether making any of these changes would lead to fewer financial and behavioral distortions.

* Seymour Logan Professor of Law, University of Chicago Law School. Thanks are due Saul Levmore, Walter Hellerstein, Charles Wolf, and participants in the Cegla Center’s Conference on Legal Discontinuity and the University of Chicago Law School’s Works in Progress Workshop for their comments on a previous draft of this article, and to the Samuel J. Kersten Faculty Fund for its financial support. Cite as: Julie Roin, Changing Places, Changing Taxes: Exploiting Tax Discontinuities, 22 THEORETICAL INQUIRIES L. 335 (2021).

Published Online: 2021-07-03
Published in Print: 2021-01-27

© 2021 by Theoretical Inquiries in Law

Articles in the same Issue

  1. Frontmatter
  2. Introduction
  3. Sizing Up Categories
  4. Disorder and Discontinuity in Law and Morality
  5. Continuity in Morality and Law
  6. Half the Guilt
  7. Line Drawing in the Dark
  8. Discontinuities in Criminal Law
  9. All-or-Nothing, or Something – Proportional Liability in Private Law
  10. Proof Discontinuities and Civil Settlements
  11. Probabilistic Disclosures for Corporate and other Law
  12. The Charitable Continuum
  13. Changing Places, Changing Taxes: Exploiting Tax Discontinuities
https://doi.org/10.1515/til-2021-0012

Articles in the same Issue

  1. Frontmatter
  2. Introduction
  3. Sizing Up Categories
  4. Disorder and Discontinuity in Law and Morality
  5. Continuity in Morality and Law
  6. Half the Guilt
  7. Line Drawing in the Dark
  8. Discontinuities in Criminal Law
  9. All-or-Nothing, or Something – Proportional Liability in Private Law
  10. Proof Discontinuities and Civil Settlements
  11. Probabilistic Disclosures for Corporate and other Law
  12. The Charitable Continuum
  13. Changing Places, Changing Taxes: Exploiting Tax Discontinuities
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