FALLS CHURCH, VA — State legislatures can easily circumvent special rules that are designed to limit tax increases because the term "tax increase" has no meaningful content, scholars David Gamage and Darien Shanske argue in the inaugural issue of "Academic Perspectives on SALT," a new column in the weekly magazine State Tax Notes.
"Special fiscal requirements are a common feature of state constitutions," according to Gamage, an assistant professor at the University of California Berkeley School of Law, and Shanske, an associate professor at the University of California Hastings College of the Law. One form of such requirements is what the authors call "tax increase limitations," or TILs.
Of TILs, they write, "It is well known that these regimes have questionable effectiveness, at least insofar as their goal is to curb the growth of government or even simply to change the pattern of government expenditures in the applicable state relative to other states not similarly constrained…
"Our key analytical observation," the authors continue, "is that TILs insert two conceptually vacuous notions — 'tax' and 'increase' — into the fiscal constitutions of the states that have them. It is at least in part because this combination is incoherent that TILs do not work."
Gamage and Shanske plan to write their column on a quarterly basis and, with it, to bring a scholarly perspective to key issues in state and local taxation.
State Tax Notes is published by the non-profit Tax Analysts. Read the inaugural edition of “Academic Perspectives on SALT.”
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