Delegating Tax

James R. Hines Jr. & Kyle D. Logue*

Congress delegates extensive and growing lawmaking authority to federal administrative agencies in areas other than taxation, but tightly limits the scope of Internal Revenue Service (IRS) and Treasury regulatory discretion in the tax area, specifically not permitting these agencies to select or adjust tax rates. This Article questions why tax policy does and should differ from other policy areas in this respect, noting some of the potential policy benefits of delegation. Greater delegation of tax lawmaking authority would allow administrative agencies to apply their expertise to fiscal policy and afford timely adjustment to changing economic circumstances. Furthermore, delegation of the tax reform process to an independent commission or agency offers the prospect of Congress committing itself to rational reform and long-run budget sustainability in a way that is more apt to succeed than piecemeal legislative efforts. The Article concludes with an analysis of the constitutionality of tax delegation, noting the applicability of recent Supreme Court decisions confirming Congress’s broad discretion to delegate rulemaking authority to federal agencies, and arguing that tax policy is of a kind with other federal policies.

* James R. Hines, Jr. is the L. Hart Wright Collegiate Professor of Law, and Kyle D. Logue is the Wade H. and Dores M. McCree Collegiate Professor of Law, both at the University of Michigan Law School. The authors thank Ellen Aprill, Alan Auerbach, Nick Bagley, Peter Barnes, Kristin Hickman, Jill Horwitz, Matt Kahn, Nina Mendelson, Katherine Pratt, Jason Oh, Richard Schmalbeck, Ted Seto, Daniel Shaviro, Joel Slemrod, Kirk Stark, Paul Stephan, Alex Stremitzer, Alex Wu, George Yin, Larry Zelenak, Eric Zolt, and seminar participants at Duke, Loyola, UCLA, and the University of Michigan for helpful comments on an earlier draft of this paper. Thanks also to Mary Miller for excellent research assistance.

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