Quantitative Model for Measuring Line-Drawing Inequity

Author:Bradley T. Borden
Position:Professor of Law, Brooklyn Law School
Pages:971-1039
SUMMARY

The law draws lines. It draws lines between manslaughter and murder, negligence and gross negligence, speeding and driving legally, and capital gains and ordinary income. Those lines invariably cause undesirable results. In particular, lines in the law cause inequity because they impose different treatment on similarly situated persons. Despite this inequity, analysts generally embrace the... (see full summary)

 
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971
Quantitative Model for Measuring
Line-Drawing Inequity
Bradley T. Borden
ABSTRACT: The law draws lines. It draws lines between manslaughter
and murder, negligence and gross negligence, speeding and driving legally,
and capital gains and ordinary income. Those lines invariably cause
undesirable results. In particular, lines in the law cause inequity because
they impose different treatment on similarly situated persons. Despite this
inequity, analysts generally embrace the quantitative comforts of inefficiency
analysis. This Article introduces a quantitative model for measuring
inequity. Consequently, the preference for quantitative measures no longer
justifies the disdain for inequity analysis. Instead, democratic and
philosophical efforts to assess laws should embrace now-quantifiable inequity
analyses as the analytical tools of choice.
The quantitative model introduces a method for measuring line-drawing
inequity. The quantitative information it yields illustrates that a line’s
location affects the amount of inequity that results from enforcing that line.
The model provides an opportunity to test and rethink the relationship
between equity and efficiency. It demonstrates that the governed may reduce
line-drawing inequity by altering their behavior to avoid negative line-
drawing effects. The model also provides quantitative evidence that the
perceived tension between equity and efficiency analyses is misinformed. In
fact, the model demonstrates that efficiency and equity may correlate in the
Professor of Law, Brooklyn Law School. I thank Ada Alaka, Miriam Baer, Ilan
Benshalom, Anita Bernstein, Yariv Brauner, Tom Brennan, Gerrit De Geest, Steve Dean,
Heather Field, Victor Fleischcer, David Gamage, Randall Hodgkinson, Stephanie Hoffer,
Rachell Holmes, Jeff Jackson, Ali Khan, Erik Knutsen, Leandra Lederman, Brian Lee, Sara
Lawsky, Gregg Macey, Lloyd Mayer, Susie Morse, Mariana Mota Prado, Rob Rhee, Larry
Ribstein, Adam Rosenzweig, Michael Schwartz, Phyllis Smith, Larry Solan, Alan Trammell,
Ralph Winters, and Stan Veliotis. I would also like to thank those who participated in the 2009
Junior Tax Scholars Workshop at Brooklyn Law School, a faculty workshop at Charleston
School of Law, the 2010 Law and Society Meeting, the 2010 and 2011 Canadian Law and
Economics Association Meetings, the 2011 Midwest Law and Economics Association Meeting,
and the 2011 Northeast Region Meeting of the American Association of Accountants for
comments on drafts of this Article and early stages of the ideas presented herein. I thank Bobbi
Bullock for helping prepare the manuscript for submission. Finally, I thank Brooklyn Law
School for supporting this project through a generous research grant. I retain full responsibility
for any errors.
972 IOWA LAW REVIEW [Vol. 98:971
line-drawing context. Finally, this Article illustrates that the criteria used to
draw a line may result in that line having an inappropriate orientation,
and concludes that excessive inequity may signal a need to change a line’s
orientation within a law or otherwise alter that law to reduce line-drawing
inequity.
I. INTRODUCTION ...................................................................................... 973
II. LINE-DRAWING IN CONTEXT .................................................................. 976
III. OVERVIEW OF INEQUITY ANALYSIS ......................................................... 984
A. GENERAL CONCEPTS OF EQUITY ........................................................ 985
B. CRITICISM OF INEQUITY ANALYSIS ..................................................... 991
C. INTUITIVE NOTION OF INEQUITY ....................................................... 993
IV. THE QUANTITATIVE MODEL .................................................................. 995
A. MEASURING INEQUITY ...................................................................... 995
B. HOW THE LOCATION OF A LINE AFFECTS INEQUITY .......................... 1003
V. RECONSIDERING THE RELATIONSHIP BETWEEN EQUITY AND
EFFICIENCY ........................................................................................... 1009
A. HOW LINEAR BEHAVIOR AFFECTS INEQUITY ..................................... 1009
B. POSITIVE CORRELATION BETWEEN EQUITY AND EFFICIENCY .............. 1018
VI. THE RELEVANCE OF A LINES ORIENTATION ........................................ 1022
A. DE FACTO REORIENTATION ............................................................. 1023
B. DE JURE REORIENTATION ................................................................ 1030
VII. INEQUITY SIGNALS LINE-DRAWING DEFECTS ....................................... 1036
VIII. CONCLUSION ....................................................................................... 1038
2013] MEASURING LINE-DRAWING INEQUITY 973
I. INTRODUCTION
Line-drawing is a prevalent and problematic part of the law. Line-
drawing occurs when the law must distinguish between two legal
phenomena. For example, the law must draw a line between murder and
manslaughter; between negligence and reasonable care; between capital
gains and ordinary income; between speeding and driving below the speed
limit; and any number of other phenomena in various areas of the law.
Drawing lines makes the law administrable and can help deter socially
unacceptable behavior. For instance, the penalty imposed on people who
speed undoubtedly deters some reckless driving.
Unfortunately, line-drawing also creates inequity. A sixty-mile-per-hour
speed limit, for example, may subject someone who drives sixty-one miles
per hour to a $200 penalty but not penalize someone who drives sixty miles
per hour. The two drivers are very similarly situated, but the law treats them
very differently. Despite the obvious inequity, line-drawing analysis has not
traditionally employed inequity as an analytical tool for three reasons. First,
some commentators believe that inequity will result regardless of where the
law draws the line,1 whether, for example, the law makes the speed limit fifty
miles per hour or seventy miles per hour. Second, critics claim that inequity
analysis is tautological and therefore unhelpful.2 They assert that equity
comparisons are unimportant because the law prescribes the treatment and
defines the class of people to whom the treatment applies.3 They would
argue, for instance, that if the speed limit is sixty miles per hour, the law can
identify speeders by examining the speed of each individual driver
regardless of other drivers’ conduct. Third, until now, inequity has not been
quantifiable in the line-drawing context. Consequently, quantitative types
have favored inefficiency analysis.
This Article reveals the weaknesses of these rationales by demonstrating
that inequity can and should be an important part of quantitative line-
drawing analyses, and introduces a model derived from tax law that
measures line-drawing inequity. The model relies upon a tax scenario for
three reasons. First, the Author is a tax scholar and is familiar with the
intricacies of the tax scenario used to construct the model. Second, a tax
scenario provides information that is readily quantifiable. Third, given the
current political climate surrounding tax policy,4 most people are familiar
1. See infra notes 68–69 and accompanying text.
2. See infra notes 71–75 and accompanying text.
3. See infra notes 68–77 and accompanying text. For example, critics might argue that the
speed limit determines whether a person is driving legally. Measuring a driver’s speed is
sufficient to determine compliance with the law, and comparing driving does nothing to
further the analysis of compliance.
4. See, e.g., Victor Fleischer, A Tax Shelter Mitt Romney Could Love, N.Y. TIMES (Sept. 25,
2012, 3:43 PM), http://dealbook.nytimes.com/2012/09/25/a-tax-shelter-mitt-romney-could-
love/?nl=business&emc=edit_dlbkpm_20120925; Suzanne Mettler & John Sides, We Are the 96

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