Volume 92, Number 6

December 2017

Are Progressive Tax Rates Progressive Policy?

Jason S. Oh

Why do income tax systems across the world consistently feature progressive marginal rates? The existing literature tells a political story focusing on the top of the rate schedule and the preferences of the poor and the middle class. According to this standard view, higher rates at the top result from the poor and the middle class using the political process to “soak the rich.” However, this explanation is inconsistent with research showing that public policy is generally more responsive to the preferences of the rich. Explaining marginal rate progressivity as a universal (and exceptional) triumph of the poor and the middle class rings hollow.

This Article resolves the tension in the existing literature by demonstrating how progressive marginal rates are consistent with the preferences of the rich. Marginal rate progressivity is the combination of two policies—higher rates at the top and lower rates at the bottom. This Article shifts the focus to the bottom of the rate schedule and argues that the rich and the middle class benefit from inframarginal tax cuts—rate cuts at low levels of income. The intuition is that taxpayers benefit from rate cuts if they occur at levels that are at or below their own income.

This means that rate progressivity is not entirely progressive policy. Increasing marginal rates at the top increases the progressivity of the fiscal system. But marginal rate cuts at low levels of income can have the opposite effect. They are particularly pernicious because they can be framed as “low-income” tax cuts. A cynical view of marginal rate progressivity is that it allows the rich and politicians to pay cheap lip service to progressivity, even though there are many better tools available for achieving that goal. Unfortunately, cutting inframarginal rates remains politically popular. Both House Speaker Paul Ryan and President Donald Trump’s tax plans feature such tax cuts prominently. Understanding the regressive effect of inframarginal rate cuts has never been more important.

The Efficiency of Equity in Local Government Finance

Zachary D. Liscow

For generations, debates over what level of government should pay for local government services—most notably school funding—have largely boiled down to a simple pair of assumptions. Having the state or federal government pay for services promotes equality across rich and poor areas, but hampers local tailoring and thereby reduces citizens’ choice sets. Economists call this an equity-efficiency trade-off—centralized funding promotes equity but undermines efficiency.

This Article argues that this presumed trade-off is not as stark as generally thought, as it ignores important and underappreciated reasons that centralization promotes choice and thus efficiency. Specifically, more centralized funding helps people live where they prefer to live, unburdened by artificially needing to pay more for services in poor jurisdictions with large numbers of impoverished households who can pay little for services themselves. This insight should not only shift the scholarly debate on the equity-efficiency trade-off, but also supply important, real-world payoffs for debates over school funding and similar programs. Put simply, centralized funding promotes equality and, by promoting choice, efficiency.

The Article does not merely make a theoretical argument; it also empirically tests the claim using natural experiments across the country in centralizing state funding for schools. The Article finds large efficiency benefits. The results also show that more centralized financing has encouraged people to move back to central cities, suggesting a second, hidden efficiency benefit to more centralized financing: It promotes the positive externalities associated with central city living. The Article could thus broaden support for more centralized funding of local services, something that could fundamentally reshape not just academic debates over fiscal federalism, but also state and local fiscal policy and urban living.

Interpreting Contracts via Surveys and Experiments

Omri Ben-Shahar, Lior Jacob Strahilevitz

Interpreting the language of contracts may be the most common and least satisfactory task courts perform in contract disputes. This Article proposes to take much of this task out of the hands of lawyers and judges, entrusting it instead to the public. The Article develops and tests a novel regime—the “survey interpretation method”—in which interpretation disputes are resolved through large surveys of representative respondents, by choosing the meaning that a majority supports. This Article demonstrates the rich potential for this method to examine variations of contractual language that could have made an intended meaning clearer. A similar survey regime has been applied successfully in trademark and unfair competition law for decades to interpret precontractual messages, and this Article shows how it could be extended to interpret contractual texts. The Article focuses on the interpretation of consumer contracts as the primary application of the proposed method, but demonstrates how the method could also apply to contracts between sophisticated parties. To demonstrate the technique, this Article applies the survey interpretation method to five real cases in which courts struggled to interpret contracts. It then provides normative, pragmatic, and doctrinal support for the proposed regime.



Alexandra Bursak

Preclusion law is notoriously convoluted. Courts have made no secret of their distaste for the doctrine, describing it variously as “conflicting,” “inconsistent,” “breeding confusion,” and ultimately “not very well liked.” Though the Supreme Court has consolidated issue and claim preclusion into a single coherent whole, this Note argues that the merger of res judicata and collateral estoppel in our modern preclusion law is incomplete. These different preclusions are motivated by different rationales: Res judicata protects private closure of parties, while estoppel began as a defense of judicial interests and expanded to forward systemic ones. Though private and systemic interests may often align, this alignment is not inevitable. In the case of public rights, failure to keep these doctrines distinct has undermined judicial ability to offer closure. Attention to the differences in historic preclusion doctrines ultimately provides a direction for modernization in the form of intervention.

Educational Opportunity for All: Reducing Intradistrict Funding Disparities

Lauren A. Webb

It is a common refrain in American education that the quality of a student’s education “should not depend on his or her zip code.” Yet American public education consistently falls short: Many schools and districts, in particular those with large populations of low-socioeconomic status (low-SES) and minority students, do not receive the funding necessary to provide their students with educational opportunities equal to those in wealthier schools. Plaintiffs in many states have sought to improve educational equity by using litigation to attack disparities in funding between districts. However, intradistrict inequity—the inequitable funding of schools within the same district—has persisted throughout the United States to the detriment of low-SES students around the country. This Note argues that these funding disparities can and should be addressed through both courts and policy changes. Students, families, and other parties harmed by intradistrict funding disparities should use state courts and state constitutions’ education clauses to extend previous interdistrict school funding victories and to force policymakers to implement more equitable intradistrict funding. Policymakers should implement school funding policies that promote comprehensive equity and take into account relevant student characteristics, including low socioeconomic status. These policies should promote comprehensive equity by providing all schools with base funding sufficient to give each student an adequate education and by distributing any funding beyond that amount equitably across schools in accordance with their students’ characteristics.

Expedited Removal and Statutory Time Limits on Judicial Review of Agency Rules

Oluwadamilola E. Obaro

The controversial scheme of “expedited removal,” which gives low-level immigration officials the authority to deport people with little to no judicial review, came roaring back into the public consciousness in the wake of President Trump’s executive order temporarily suspending entry into the United States of individuals from certain Muslim-majority countries. Hugely controversial since its inception, challenges to the expedited removal statutory scheme are blocked by a sixty-day time limit to challenges to any regulations or procedures implementing the expedited removal provisions. Rather than address the constitutionality of the expedited removal system itself, this Note focuses on that sixty-day time limit. Congress frequently uses statutorily imposed time limits to curb judicial review of agency rules. But the validity of a statutory time limit on judicial review of agency rules cannot be evaluated independently of the scope of the judicial review that it restricts. When, as is the case with expedited removal, a statutory time limit forecloses the constitutional challenges of people whose claims could not have been raised during the prescribed time limit, that time limit poses serious constitutional concerns. In light of these concerns, this Note argues that courts should not read the expedited removal time-limit to bar constitutional challenges to the expedited removal system that could not have been raised within the prescribed time limit. Unfortunately, despite the disturbing constitutional implications of the expedited removal time limit, there are considerable doctrinal and jurisdictional challenges to convincing a court to exercise jurisdiction over such a challenge. The Note concludes by discussing some of these potential barriers and ways in which the planned future expansion of expedited removal might help to overcome some of these roadblocks.

Reliance by Whom? The False Promise of Societal Reliance on Stare Decisis Analysis

Alexander Lazaro Mills

Under the doctrine of stare decisis, an important factor in determining whether to uphold or overrule a constitutional precedent is whether there are reliance interests in the rule it established. The Supreme Court’s analysis of reliance in this context has been brief and conclusory, leaving indeterminate the precise nature of the reliance interests at stake and causing uncertainty as to which forms of reliance the Court will deem cognizable in the future. Beginning with Planned Parenthood of Southeastern Pennsylvania v. Casey, the Court has signaled a willingness to give weight to societal reliance—reliance interests of society as a whole. Drawing on previous scholarship, I argue that societal reliance should be given no weight. To measure reliance for stare decisis, the Court should first identify the entities that have taken steps in reliance upon the challenged precedent and then weigh the costs of repudiation to those entities. When purported reliance interests cannot be attributed to particular entities but instead belong to society as a whole, no true reliance is at stake, and it should therefore count for nothing. Adopting this approach will provide clarity, consistency, and predictability to the Court’s determinations whether to uphold or overrule constitutional precedents.

Conditional Spending and the Need for Data on Lethal Use of Police Force

Grace E. Leeper

When it wants to be, the federal government is good at counting things. It tracks average daily caffeine intake (300 milligrams per adult older than twenty-two in 2008), weekly instances of the flu (875 reported by public health laboratories in the week ending January 14, 2017), monthly production of hens’ eggs (8.97 billion in December 2016), and annual bicycle thefts (204,984 in 2015). But it currently cannot provide a comprehensive count of how often police officers use lethal force against its citizens. The deaths of Michael Brown, Walter Scott, Tamir Rice, Laquan McDonald—all unarmed, black, and shot by police officers—and far too many others have forced the issue of lethal police use of force into the national consciousness. But while many recent reports have focused on the unreliability of current data, there has been relatively little consideration of how, exactly, the federal government might go about getting it. This Note seeks to fill this gap by laying out the contours within which the federal government can act to incentivize states to collect more and better data. After highlighting the need for robust data collected at the federal level and describing various issues with the current state of federal collection of law enforcement data, this Note outlines the legal landscape legislators considering such a policy must grapple with: the combination of federalism concerns that are particularly acute in the sphere of state and local law enforcement, and the Supreme Court’s somewhat ambiguous conditional spending jurisprudence. Finally, it explains how the federal government might incentivize data collection without running afoul of the law, proposing a legislative scheme for federal collection of law enforcement data that combines national guidelines, conditional spending requirements, and competitive grant funding.

LGBT Rights and the Administrative State

Max Isaacs

Normally we don’t think of administrative agencies as policing constitutional equality norms. There’s a good reason for this—courts are often thought of as the “ultimate expositor” of constitutional meaning, while agencies are thought of as undertaking not constitutional interpretation, but statutory implementation. But recently scholars have explored the ways in which constitutionalism enters agency decisionmaking—commonly referred to as “administrative constitutionalism.” Administrative constitutionalism theories loosen the assumption that courts have a monopoly on constitutional understanding, and instead recognize agencies as constitutional actors in their own right. This Note explores how agencies have engaged in administrative constitutionalism to police LGBT equality rights—often in ways that differ markedly from judicial applications of equal protection. It then offers a defense of these practices, arguing that agencies have acted in the face of widespread underenforcement of equality norms by the judiciary owing largely to institutional considerations that—justified or not—have no bearing on the meaning of equal protection.

Certifying Statutory Class Actions in the Shadow of Due Process

Tyler J. Domino

Recognizing privacy harms, Congress has created a patchwork of statutes that provide private rights of action with statutory damages. These statutes allow individuals to vindicate procedural and substantive violations without having to show actual damages. At the same time, however, through the rise of the Internet, some companies interact with millions of users a day. If the claims are aggregated, these companies rightly fear that an inadvertent violation of one of these statutes will lead them into bankruptcy. And they rightly fear that users with weak claims will seek class certification to coerce them into settlements for the benefit of class counsel alone. However, refusing to certify these classes practically eliminates the substantive rights Congress attempted to protect.

By raising due process concerns at the certification stage, courts can signal to litigants that the liability faced will not be as astronomical as rote multiplication would imply. This could, somewhat, level the playing field in settlement negotiations while maintaining the deterrence effect Congress intended to create. And it allows large, Internet-based companies to decide to go to trial against weak claims without the fear of crippling liability.