Friday, October 19, 2012

Trust Fund Recovery Penalty and Judge Posner

Judge Posner has been much in the news recently.  Last night in the UH Tax Procedure Class we covered the Trust Fund Recovery Penalty ("TFRP"), also known as the responsible person penalty.  In my Tax Procedure Book, I conclude my discussion of the TFRP with an extended quote from Judge Posner's decision in Mortenson v. National Union Fire Insurance Co., 249 F.3d 677 (7th Cir. 2001).  I have included that conclusion in a prior blog titled Trust Fund Recovery Penalty (TFRP) Procedures (10/3/12), here.  I therefore won't repeat it here, but encourage readers to go to that blog entry to read it.  Judge Posner just has a way to summarize key concepts in memorable ways.

Judge Posner expounds on topics well beyond the law.  Judge Posner and his colleague, Gary Becker, co-host a blog where they interact on significant issues of the day, particular in the intersection of the law and the economy.  The Blog is called the Becker-Posner Blog.  Judge Posner's Wikipedia entry is here; Gary Becker's Wikipedia entry is here.  They recently had this exchange in two entries:: Richard Posner, Luck, Wealth, and Implications for Policy--Posner (The Becker-Posner Blog 10/14/12), here, and Gary Becker, Luck and Taxation-Becker (10/14/12), here.

Judge Posner has some fascinating analyses about the proper level of taxation and whether anyone "deserves" to pay less than some normative level of tax.  Some provocative excerpts that he is prepared to back up:
In short, I do not believe in free will. I think that everything that a person does is caused by something. It is true, and is the basis of belief in free will, that often we are conscious of considering pros and cons in deciding on a course of action; “we” are deciding, rather than having the decision made by something outside “us.” But calculation and decisionmaking are different. Deciding may just mean calculating the balance of utility and disutility; the result of the balance determines the decision. No doubt when a cat pounces on a mouse, it has decided to do so; but the decision was compelled by circumstances—the feline diet, the presence of the mouse, etc. A complete description of the incident would not require positing free will. 
If this is right, a brilliant wealthy person like Bill Gates is not “entitled” to his wealth in some moral, Ayn Randian sense. But it would be ridiculous to infer from this that the government should take his wealth away from him and scatter it among the poor, on the theory that the only difference between Gates and a poor person is that one is lucky and the other is not. But the reason that it would be ridiculous is that it would have terrible incentive effects, not that it would violate some deep sense of human freedom. 
This is no substitute for reading the entire blog entries, but it may whet the appetite.

No comments:

Post a Comment