IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/9596.html
   My bibliography  Save this paper

Transition Policy: A Conceptual Framework

Author

Listed:
  • Louis Kaplow

Abstract

Legal change, whether through legislation, regulation, or court decision, is a common phenomenon, and virtually all reform creates both gains and losses for those who under the prior regime took actions that would have lasting effects. This article offers a conceptual framework for assessing the desirability of different transition policies, ranging from compensation of losses and taxation of gains, grandfathering of pre-enactment investments, and delayed or partial implementation to complete and immediate implementation or even retroactive application. Emphasis is placed on how transitions and various mitigation strategies affect the incentives of and risk borne by private actors as well as on the behavior of government and how it may be affected by transition policy.

Suggested Citation

  • Louis Kaplow, 2003. "Transition Policy: A Conceptual Framework," NBER Working Papers 9596, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:9596
    Note: LE PE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w9596.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Slemrod, Joel & Yitzhaki, Shlomo, 2001. "Integrating Expenditure and Tax Decisions: The Marginal Cost of Funds and the Marginal Benefit of Projects," National Tax Journal, National Tax Association;National Tax Journal, vol. 54(2), pages 189-202, June.
    2. William P. Rogerson, 1984. "Efficient Reliance and Damage Measures for Breach of Contract," RAND Journal of Economics, The RAND Corporation, vol. 15(1), pages 39-53, Spring.
    3. Levmore, Saul, 1993. "The Case for Retroactive Taxation," The Journal of Legal Studies, University of Chicago Press, vol. 22(2), pages 265-307, June.
    4. Kaplow, Louis, 1995. "A Fundamental Objection to Tax Equity Norms: A Call for Utilitarianism," National Tax Journal, National Tax Association, vol. 48(4), pages 497-514, December.
    5. Steven Shavell, 2003. "Economic Analysis of Accident Law," NBER Working Papers 9694, National Bureau of Economic Research, Inc.
    6. Hermalin, Benjamin E, 1995. "An Economic Analysis of Takings," Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(1), pages 64-86, April.
    7. David Bradford, "undated". "Consumption Taxes: Some Fundamental Transition Issues," EPRU Working Paper Series 95-15, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    8. Thomas J. Miceli & Kathleen Segerson, 2011. "Regulatory Takings," Working papers 2011-16, University of Connecticut, Department of Economics.
    9. Kaplow, Louis, 1989. "Horizontal Equity: Measures in Search of a Principle," National Tax Journal, National Tax Association, vol. 42(2), pages 139-54, June.
    10. Kaplow, Louis & Shavell, Steven, 2002. "Economic analysis of law," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 25, pages 1661-1784 Elsevier.
    11. Musgrave, Richard A., 1990. "Horizontal Equity, Once More," National Tax Journal, National Tax Association, vol. 43(2), pages 113-22, June.
    12. Cordes, Joseph J. & Weisbrod, Burton A., 1979. "Governmental behavior in response to compensation requirements," Journal of Public Economics, Elsevier, vol. 11(1), pages 47-58, February.
    13. Feldstein, Martin, 1976. "On the theory of tax reform," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 77-104.
    14. Arnott, Richard & Stiglitz, Joseph E, 1991. "Moral Hazard and Nonmarket Institutions: Dysfunctional Crowding Out or Peer Monitoring?," American Economic Review, American Economic Association, vol. 81(1), pages 179-190, March.
    15. Kaplow, Louis, 1993. "An ex ante perspective on deregulation, viewed ex post," Resource and Energy Economics, Elsevier, vol. 15(2), pages 153-173, June.
    16. Mervyn A. King, 1980. "An Index of Inequality: With Applications to Horizontal Equity and Social Mobility," NBER Working Papers 0468, National Bureau of Economic Research, Inc.
    17. Kaplow, Louis, 1992. "Income Tax Deductions for Losses as Insurance," American Economic Review, American Economic Association, vol. 82(4), pages 1013-1017, September.
    18. Baxter, William F & Altree, Lillian R, 1972. "Legal Aspects of Airport Noise," Journal of Law and Economics, University of Chicago Press, vol. 15(1), pages 1-113, April.
    19. Robert Innes, 2000. "The Economics of Takings and Compensation When Land and Its Public Use Value Are in Private Hands," Land Economics, University of Wisconsin Press, vol. 76(2), pages 195-212.
    20. Glazer, Amihai, 1989. "Politics and the Choice of Durability," American Economic Review, American Economic Association, vol. 79(5), pages 1207-1213, December.
    21. King, Mervyn A, 1983. "An Index of Inequality: With Applications to Horizontal Equity and Social Mobility," Econometrica, Econometric Society, vol. 51(1), pages 99-115, January.
    22. Steven Shavell, 1980. "Damage Measures for Breach of Contract," Bell Journal of Economics, The RAND Corporation, vol. 11(2), pages 466-490, Autumn.
    23. Sarkar, Shounak & Zodrow, George R., 1993. "Transitional Issues in Moving to a Direct Consumption Tax," National Tax Journal, National Tax Association;National Tax Journal, vol. 46(3), pages 359-376, September.
    24. Kaplow, Louis, 1995. "A Fundamental Objection to Tax Equity Norms: A Call for Utilitarianism," National Tax Journal, National Tax Association;National Tax Journal, vol. 48(4), pages 497-514, December.
    25. Ng, Yew-Kwang, 2000. "The Optimal Size of Public Spending and the Distortionary Cost of Taxation," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(2), pages 253-272, June.
    26. Louis Kaplow, 1985. "Horizontal Equity: Measures in Search of a Principle," NBER Working Papers 1679, National Bureau of Economic Research, Inc.
    27. Kaplow, Louis, 1992. " Government Relief for Risk Associated with Government Action," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(4), pages 525-541.
    28. Kaplow, Louis, 1991. "Incentives and Government Relief for Risk," Journal of Risk and Uncertainty, Springer, vol. 4(2), pages 167-175, April.
    29. Fischel, Daniel R & Sykes, Alan O, 1999. "Governmental Liability for Breach of Contract," American Law and Economics Review, Oxford University Press, vol. 1(1-2), pages 313-385, Fall.
    30. Louis Kaplow, 1991. "The Income Tax as Insurance: The Casualty Loss and Medical Expense Deductions and the Exclusion of the Medical Insurance Premiums," NBER Working Papers 3723, National Bureau of Economic Research, Inc.
    31. Kaplow, Louis, 1989. "Horizontal Equity: Measures in Search of a Principle," National Tax Journal, National Tax Association;National Tax Journal, vol. 42(2), pages 139-154, June.
    32. Musgrave, Richard A., 1990. "Horizontal Equity, Once More," National Tax Journal, National Tax Association;National Tax Journal, vol. 43(2), pages 113-122, June.
    33. Fischel, William A. & Shapiro, Perry, 1989. "A constitutional choice model of compensation for takings," International Review of Law and Economics, Elsevier, vol. 9(2), pages 115-128, December.
    34. Farber, Daniel A., 1992. "Economic analysis and just compensation," International Review of Law and Economics, Elsevier, vol. 12(2), pages 125-138, June.
    35. Sarkar, Shounak & Zodrow, George R., 1993. "Transitional Issues in Moving to a Direct Consumption Tax," National Tax Journal, National Tax Association, vol. 46(3), pages 359-76, September.
    36. Zodrow, George R., 1985. "Optimal tax reform in the presence of adjustment costs," Journal of Public Economics, Elsevier, vol. 27(2), pages 211-230, July.
    37. Louis Kaplow, 1994. "A Fundamental Objection to Tax Equity Norms: A Call for Utilitarianism," NBER Working Papers 4961, National Bureau of Economic Research, Inc.
    38. Lawrence Blume & Daniel L. Rubinfeld & Perry Shapiro, 1984. "The Taking of Land: When Should Compensation Be Paid?," The Quarterly Journal of Economics, Oxford University Press, vol. 99(1), pages 71-92.
    39. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
    40. Usher, Dan, 1995. "Victimization, Rent-Seeking and Just Compensation," Public Choice, Springer, vol. 83(1-2), pages 1-20, April.
    41. Wickelgren, Abraham L, 2001. "Damages for Breach of Contract: Should the Government Get Special Treatment?," Journal of Law, Economics, and Organization, Oxford University Press, vol. 17(1), pages 121-148, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Louis Kaplow, 2006. "Capital Levies and Transition to a Consumption Tax," NBER Working Papers 12259, National Bureau of Economic Research, Inc.
    2. Gligor Bishev & Mihail Petkovski, 2004. "Understanding Reforms in Macedonia," wiiw Balkan Observatory Working Papers 42, The Vienna Institute for International Economic Studies, wiiw.

    More about this item

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:9596. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.