Book contents
- Toward an Inframarginal Revolution
- Toward an Inframarginal Revolution
- Copyright page
- Contents
- Figures
- Tables
- Contributors
- Acknowledgments
- 1 Introduction to Inframarginalism and This Volume
- 2 A New Corporate Tax
- 3 The Progressive Case against Antimonopolism
- 4 An Inframarginalist Argument for Mandating the Use of Pro-Consumer Boilerplate
- 5 Inframarginalism and the Distributive Corollary of the Coase Theorem
- 6 Distributive Consequences of Regulating Boilerplate
- 7 (How) Does Competition Law Address Quality?
- 8 Self-Colonization in American Law
- 9 Taxing Imputed Land Rent
- 10 A Neo-Kantian Approach to Competition Law?
- 11 Is Commodity Private Property Inherently Regressive?
- 12 The EU Regulatory Patchwork for Dark Patterns
- 13 Inframarginalism and Economism
- 14 Hipster Antiplagiarism
- Index
- References
5 - Inframarginalism and the Distributive Corollary of the Coase Theorem
Published online by Cambridge University Press: 26 September 2025
Edited by
Book contents
- Toward an Inframarginal Revolution
- Toward an Inframarginal Revolution
- Copyright page
- Contents
- Figures
- Tables
- Contributors
- Acknowledgments
- 1 Introduction to Inframarginalism and This Volume
- 2 A New Corporate Tax
- 3 The Progressive Case against Antimonopolism
- 4 An Inframarginalist Argument for Mandating the Use of Pro-Consumer Boilerplate
- 5 Inframarginalism and the Distributive Corollary of the Coase Theorem
- 6 Distributive Consequences of Regulating Boilerplate
- 7 (How) Does Competition Law Address Quality?
- 8 Self-Colonization in American Law
- 9 Taxing Imputed Land Rent
- 10 A Neo-Kantian Approach to Competition Law?
- 11 Is Commodity Private Property Inherently Regressive?
- 12 The EU Regulatory Patchwork for Dark Patterns
- 13 Inframarginalism and Economism
- 14 Hipster Antiplagiarism
- Index
- References
Summary
The double-distortion argument holds that income taxation is more efficient than redistribution through changes in legal rules because a change in a legal rule distorts both the market to which the rule applies and, by altering incomes of market participants, the labor market as well. The argument succeeds only if it is possible to achieve the same distributive outcomes with the income tax as with changes to legal rules. This is not the case, however, because tax authorities cannot obtain information regarding the extent of the surplus available for redistribution without altering legal rules in individual markets and observing whether the effect is inframarginal (in which case there is surplus available for redistribution) or marginal (in which case there is not). This point is illustrated using the Ayres and Talley model of Coasean bargaining with divided entitlements.
Keywords
Information
- Type
- Chapter
- Information
- Toward an Inframarginal RevolutionRedistributing the Gains from Trade, pp. 124 - 160Publisher: Cambridge University PressPrint publication year: 2025
References
Avraham, Ronen, Fortus, David, and Logue, Kyle. 2003. “Revisiting the Roles of Legal Rules and Tax Rules in Income Redistribution: A Response to Kaplow & Shavell.” Iowa Law Review 89:1125.Google Scholar
Ayres, Ian, and Talley, Eric. 1995. “Solomonic Bargaining: Dividing a Legal Entitlement to Facilitate Coasean Trade.” Yale Law Journal 104 (5): 1027–117.CrossRefGoogle Scholar
Calabresi, Guido. 1991. “The Pointlessness of Pareto: Carrying Coase Further.” Yale Law Journal 100:1211–37.CrossRefGoogle Scholar
Calabresi, Guido, and Melamed, A Douglas. 1972. “Property Rules, Liability Rules, and Inalienability: One View of the Cathedral.” Harvard Law Review 85 (6): 1089–128.CrossRefGoogle Scholar
Coase, RH. 1960. “The Problem of Social Cost.” Journal of Law & Economics 3:1–44.CrossRefGoogle Scholar
Cooter, Robert, and Ulen, Thomas. 2016. Law and Economics. 6th ed. Boston: Addison-Wesley.Google Scholar
Fennell, Lee Anne, and McAdams, Richard H. 2016. “The Distributive Deficit in Law and Economics.” Minnesota Law Review 100:1051–129.Google Scholar
Gamage, David. 2014. “How Should Governments Promote Distributive Justice?: A Framework for Analyzing the Optimal Choice of Tax Instruments.” Tax Law Review 68:1–87.Google Scholar
Hamada, Koichi. 1976. “Liability Rules and Income Distribution in Product Liability.” American Economic Review 66 (1):228–34.Google Scholar
Jolls, Christine. 1998. “Behavioral Economics Analysis of Redistributive Legal Rules.” Vanderbilt Law Review 51:1653.Google Scholar
Kaplow, Louis. 2004. “On the (Ir)Relevance of Distribution and Labor Supply Distortion to Government Policy.” Journal of Economic Perspectives 18(4):159–75.CrossRefGoogle Scholar
Kaplow, Louis. 2008. The Theory of Taxation and Public Economics. Princeton: Princeton University Press.Google Scholar
Kaplow, Louis, and Shavell, Steven. 1994. “Why the Legal System Is Less Efficient Than the Income Tax in Redistributing Income.” Journal of Legal Studies 23 (2):667–81.Google Scholar
Kaplow, Louis, and Shavell, Steven. 2000. “Should Legal Rules Favor the Poor? Clarifying the Role of Legal Rules and the Income Tax in Redistributing Income.” Journal of Legal Studies 29 (2): 821–35.Google Scholar
Liscow, Zachary. 2014. “Reducing Inequality on the Cheap: When Legal Rule Design Should Incorporate Equity as Well as Efficiency.” Yale Law Journal 123 (7): 2478–510.Google Scholar
Polinsky, A Mitchell. 1989. An Introduction to Law and Economics. 2nd ed. New York: Aspen Publishers.Google Scholar
Sanchirico, Chris William. 2000. “Taxes versus Legal Rules as Instruments for Equity: A More Equitable View.” Journal of Legal Studies 29 (2):797–820.CrossRefGoogle Scholar
Sanchirico, Chris William. 2001. “Deconstructing the New Efficiency Rationale.” Cornell Law Review 86:1003–89.Google Scholar
Schwab, Stewart. 1989. “Coase Defends Coase: Why Lawyers Listen and Economists Do Not.” Michigan Law Review 87 (6):1171–2459.CrossRefGoogle Scholar
Segal, Ilya, and Whinston, Michael D. 2014. “The Efficiency of Bargaining under Divided Entitlements.” University of Chicago Law Review 81 (1): 273–89.Google Scholar
Segal, Ilya, and Whinston, Michael D. 2016. “Property Rights and the Efficiency of Bargaining.” Journal of the European Economic Association 14 (6): 1287–328.CrossRefGoogle Scholar
Weisbach, David A. 2015. “Distributionally Weighted Cost–Benefit Analysis: Welfare Economics Meets Organizational Design.” Journal of Legal Analysis 7 (1): 151–82.CrossRefGoogle Scholar
Accessibility standard: Unknown
Accessibility compliance for the PDF of this book is currently unknown
and may be updated in the future.