With the Income Tax Under Sustained Attack, Professor Rebecca Morrow's Insights Are Especially Welcome
Almost every year, I contribute an essay to the tax law sub-site of Jotwell - The Journal of Things We Like (Lots), which is edited at the University of Miami's law school. I was not able to produce a piece last year, but I am confident that I more than made up for that this year with "I’m Not a Distortion, You’re a Distortion!" which was published last week (July 17, 2025). There, I reviewed an article by Professor Rebecca Morrow of Wake Forest's law school, The Income Tax as a Market Correction, which is forthcoming in UC San Francisco's flagship law journal.
Jotwell's "jots" are relatively short, in this instance just a bit more than 1200 words, which means that I can ask readers here to click over and read that article with some hope that many of you will do so. I will add only a few more thoughts here on Dorf on Law, again being uncharacteristically brief. The most important issue can be found in the title of this column, regarding the Republicans' attack on the income tax. This is well timed (though coincidental), given the recent passage of the Trump/Republican abomination of a budget bill.
That bill included -- among too many terrible provisions even to list here, much less discuss -- a permanent extension of the provisions of Trump's one and only major piece of legislation during his first term, the late-2017 tax bill that was at the time so embarrassing that most experts could not believe that it had been proposed, much less passed. As the very mainstream (which in this case is not a subtle dig, although I confess that it usually would be, coming from me) Brookings analyst William Gale wrote in 2019: "Rushed through Congress without adequate hearings and passed by a near-party-line vote, the law is a major legislative blunder badly in need of correction."
I feel honor-bound to point out that the now-sainted Senator John McCain not only supported that bill, but he did so after having scolded his colleagues only a few weeks before for not following "regular order" on other legislation. Yet when it came to following his party's Prime Directive -- "Tax cuts for rich people are always our first priority" -- who cared about order, regular or otherwise?
Why is that relevant now? As I wrote in my 2018 jot (reviewing work by Professor Alice Abreu), the 2017 tax act all but abandoned the ability-to-pay principle, which is one of the most important reasons to have an income tax in the first place. It is true that the Republicans (assisted too often by conservative Democrats) had spent decades hacking away at the progressive elements of the income tax, but 2017 took it to a new level. In the years that followed, everyone ignored Gale's call for a "correction" to that major legislative blunder, and Republicans have now used the 2025 law to make all of it permanent -- while adding many more regressive provisions to the toxic stew. By now, the US income tax is barely recognizable as an income tax at all.
Professor Morrow's article is a sophisticated defense of the income tax against one of the more hoary and tedious arguments from conservatives, specifically their empty claim that the income tax is "inefficient." Anyone who has read even a small subset of my work knows that I become apoplectic about the use of the word efficiency in any form, because there is no objective or independent way to specify the baseline needed to call anything efficient or inefficient (or even comparatively more or less efficient). Therefore, when right-wing economists and politicians call something inefficient, they are merely saying, "I'm using an arbitrary baseline to hide my subjective judgments, calling something I oppose on ideological grounds inefficient because that sounds scientific."
What I liked most about Professor Morrow's article was that she turned the efficiency trope back on the anti-income tax people by saying that the supposed "distortions" of the income tax are in fact corrections to distortions that otherwise exist. Hence the cheeky riposte that I used as the title of my jot: "I’m Not a Distortion, You’re a Distortion!" Professor Morrow is saying in the income tax context what can be said in all such contexts, which is that any attempt to brand something as inefficient can always be flipped to show precisely the opposite. Specifically, she argues persuasively that the income tax can be seen as an un-distorter (my clunky neologism, of course, not hers) of the pervasive problem of risk aversion, which conservative economists have had to concede is a distortion even on their preferred terms.
In an off-blog communication, a reader who had seen last week's jot reminded me of a point that I often make when teaching my basic tax law classes, which is that those who fault the income tax or any other tax for being inefficient must face a very specific version of the baseline problem. That is, even if we were to ignore the general impossibility of specifying a baseline, those who attack any particular type of tax for being inefficient must offer an alternative tax system that is somehow non-distorting (or perhaps less so, measured in some clever way). This has led some right-wing scholars to embrace insane ideas that are beyond the scope of this discussion, but I will offer the teaser that one such idea involves taxing people on the income that they could have earned if they used their talents to the fullest extent possible in the paid economy. Why? Because although people can reduce their taxes by working fewer hours, they supposedly cannot reduce their capacity to earn income.
Again, that digression is too weird to explain any further here, but the point is that every real-world tax system (income tax or otherwise) will cause some people to change some of their behavior. That is, every real-world tax can be called a distortion. Contributions like Professor Morrow's remind us that the same economic toolkit that allows some people to point accusing fingers and say, "You're being inefficient, you monsters!" can just as easily be used to say, "Get over yourself, I'm fixing what even you would call an inefficiency."
And with that, we can all get back to regular programming, which these days involves thinking about the end of the rule of law in the United States.
- Neil H. Buchanan