Tax (Dis)conformity, Reverse Federalism, and Social Justice Reform

Abstract

This Article revisits a familiar administrative feature of state income tax law—federal-state tax conformity—through a reverse federalism lens. Federal-state tax conformity refers to the process by which states incorporate aspects of federal law into their state income tax codes. For example, states may choose to adopt federal definitions of income, or they may simply enact state level tax laws that parallel federal laws. Even when state law does “conform” to the federal law, however, differences may arise when a state legislature declines to adopt all aspects of federal law, or when a state enacts legislation to partially decouple from the federal law.

These acts of “disconformity,” when state tax laws are derived from—but are not identical to—federal law, are key to operationalizing the reverse federalism potential for state tax reform. Ultimately, reverse federalist reform strategies rely on states to push national policy, either by encouraging lateral conformity across states or by spurring changes to federal law. Where others have argued that disconformity can help minimize federal encroachment on state tax systems, this Article argues that strategic disconformity can help push national policy and promote social justice goals. This theory of disconformity shifts the focus away from its defensive role within a federalist system, highlighting its capacity to serve as a powerful corrective to federal law.

Document Type

Article

Year

2022

Publication Title

Seton Hall Law Review

Volume

53

Number

4

Starting Page

1030

Publication Info

53 Seton Hall Law Review 413 (2022)

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