Cornell Law Review Volume 102 Issue 3


Existing statutes give the President and his Treasury Department broad authority to implement important elements of the administration’s tax agenda without further congressional action. And yet only occasionally does the executive branch exercise this statutory “power to tax.” Instead, the President often asks Congress to pass revenue-raising measures achieving what the President and his Treasury Department already could accomplish on their own. And even when Congress rebuffs the President’s request, past administrations only rarely have responded by exercising the regulatory authority they already possess. All the while, past Presidents have stretched the limits of executive authority in a taxpayer-friendly direction—even over Congress’s expressed preferences.

This Article attempts to explain the peculiar patterns of executive action and inaction observed in the tax policymaking domain. It draws on public choice theory and game theory to build a strategic model of interactions between the executive and legislative branches. The model generates several counterintuitive implications. Among others: a strong anti-tax faction in Congress may increase the probability that revenue-raising regulatory measures are implemented; judicial deference to Treasury regulations may reduce lawmakers’ willingness to pass revenue-raising fixes to existing tax statutes; and statutory rules requiring legislation to be “deficit-neutral” may discourage the administration from taking deficit-closing regulatory actions.

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