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Copyright (c) 1990 New York University School of Law
Tax Law Review

ARTICLE: Psychic Income Revisited: Response to Professors Johnson and Dodge

SUMMER, 1990

45 Tax L. Rev. 707




Since controversy is always fun (at least for the reader), I regret that I do not disagree more with Professors Johnson and Dodge. I will address their comments in turn, starting with Professor Johnson in order to move from the more particular to the more general level of disagreement.

Professor Johnson. My main complaint is that Professor Johnson has failed to state my position correctly. He regards me as having rejected basic income tax principles in favor of aesthetics and intuition. 1 What I said, however, as he accurately quotes, is that I would hold for the taxpayer on aesthetic grounds rather than as a "logically necessary consequence of basic income tax principles." 2 In other words, since I believe basic income tax principles do not require a holding either way, I rely on aesthetics and intuition to choose between two equally plausible alternatives.

The type of argument I make is a familiar one, dating back at least to Professor William Andrews' well-known discussion of the case in favor of medical deductions. 3 The argument raises the issue of whether to recognize selectively the consequences of something that in principle ought to be recognized in all cases, but is not. Under a perfect psychic income tax (which the inaptly named "ideal" market-value-based income tax attempts to approximate), 4 disutility would reduce taxable income in all cases: Zarin's psychic disutility in my example, or the disutility of illness in Andrews' example. Since psychic values that tend not to be ...
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