W HEN DISADVANTAGEOUS CHANGES IN TAX RULES ARE INTRODUCED, TAXPAYERS SHOULD NOT RECEIVE TRANSITION RELIEF. RESTATED: L EGISLATURES SHOULD BE FREE TO ENACT FULLY RETROACTIVE LEGISLATION DESPITE EXPECTATIONS OF THOSE RELYING ON EXISTING TAX LAW Despite dominance of arguments in favor in academic literature in US, US courts have not embraced US legislatures have not embraced

W HEN DISADVANTAGEOUS CHANGES IN TAX RULES ARE INTRODUCED, TAXPAYERS SHOULD NOT RECEIVE TRANSITION RELIEF. Transition relief need not always be given, but can be denied only in special cases, where such relief would be unjustified. Burden should not be on taxpayers to prove reliance, but on government to demonstrate reliance totally unjustified. loophole closers, measured against clear norms validation statutes, at least where tp did not immediately complain of lack of power

W HEN DISADVANTAGEOUS CHANGES IN TAX RULES ARE INTRODUCED, TAXPAYERS SHOULD NOT RECEIVE TRANSITION RELIEF. Expectation of no transition relief leaves full play for legislature in any case in which rights are neither “property” nor “contract” Here, not assuming creating judiciable rights, but only norm for legislative behavior

W HEN DISADVANTAGEOUS CHANGES IN TAX RULES ARE INTRODUCED, TAXPAYERS SHOULD NOT RECEIVE TRANSITION RELIEF. Presumption against transition relief anticipates that taxpayers should not and will not “trust” government actions. This is a self-fulfilling prophecy

W HEN DISADVANTAGEOUS CHANGES IN TAX RULES ARE INTRODUCED, TAXPAYERS SHOULD NOT RECEIVE TRANSITION RELIEF. Just because we know tax laws will change does not mean we should make it too easy to change.

W HEN DISADVANTAGEOUS CHANGES IN TAX RULES ARE INTRODUCED, TAXPAYERS SHOULD NOT RECEIVE TRANSITION RELIEF. Presumption against transition relief anticipates that taxpayers should not and will not “trust” government actions. Most arguments against transition relief fail to take into account the effect such a policy on the behavior of the legislature.

W HEN DISADVANTAGEOUS CHANGES IN TAX RULES ARE INTRODUCED, TAXPAYERS SHOULD NOT RECEIVE TRANSITION RELIEF. The possible effects on legislative behavior: When deviations from “good” policy are harder to remove, they are less likely to be enacted to begin with. A presumption in favor of transitional relief increases the cost of rule changes with clear losers.

W HEN DISADVANTAGEOUS CHANGES IN TAX RULES ARE INTRODUCED, TAXPAYERS SHOULD NOT RECEIVE TRANSITION RELIEF. The possible effects on legislative behavior: Lack of norm of generally available transition prompts transition relief as only as exception. Transition relief only as exception generally bad: “rifle shots” No limit on extent to which legislators may threaten change. Will unduly reward access to legislators.

W HEN DISADVANTAGEOUS CHANGES IN TAX RULES ARE INTRODUCED, TAXPAYERS SHOULD NOT RECEIVE TRANSITION RELIEF. If taxpayers should always anticipate change, cost of using tax system to affect behavior becomes high. Higher benefit must be paid Earlier enjoyment of that benefit must be provided Less “natural” delivery system (eg, deductions for cost recovery> actual cost)

W HEN DISADVANTAGEOUS CHANGES IN TAX RULES ARE INTRODUCED, TAXPAYERS SHOULD NOT RECEIVE TRANSITION RELIEF. Should taxpayer reliance really be viewed only as bets about future government actions? How often will the person entitled to transition relief actually have bet against good government policy?

W HEN DISADVANTAGEOUS CHANGES IN TAX RULES ARE INTRODUCED, TAXPAYERS SHOULD NOT RECEIVE TRANSITION RELIEF. Transition losses can be different from transition gains. The more retroactive a position, the clearer it is that winners and losers can be (and have been) identified. Windfall gains much less likely to be known, much less likely to be knowable.