Granting Tax

I. Introduction

In 2017, Congress passed the Tax Cuts and Jobs Act (TCJA).^[1] The law made significant changes to our tax structure, significantly cutting the corporate tax rate and changing the underlying structure of cross-border taxation.^[2] Additionally, the law had significant distributional effects that helped to reduce the tax rates on wealthy Americans. Furthermore, numerous portions of the law itself created new games that multinational entities (MNEs) and the wealthy could exploit to push their taxes lower.^[3] Indeed, other than these groups, few had the capacity to work with Congress during the rushed passage of the law. As a result, there was a lack of not only pushes for equity, but issues democratically in both the process and the substance of the legislation.^[4]

But the story does not stop there. Similar democratic problems also appeared after Congress passed the law and after the Treasury Department (Treasury) and the IRS implemented it. For example, the law created a new program called the Opportunity Zones (OZs) program.^[5] The goal was to spur equity investments in underserved communities. But many of the communities that should have benefited from the OZs program were given little voice in how the Treasury and the IRS should implement the program, and in turn, the projects that were invested were projects of dubious value.^[6] Similarly, in some of the international tax areas, the Treasury and the IRS received comments from many MNEs and their advisors seeking more favorable treatment. But few pushed back in a way that outlined how this was an even bigger giveaway to powerful interests at the expense of the tax system and the broader public. Again and again, these processes did not include voices other than those who were already entrenched in the legislative process.^[7]

These examples show the importance of the development of regulation and other administrative guidance. While moves in recent years have helped make the process of formulating Treasury Regulations more democratic, the process still suffers.^[8] It is often highly technical and less visible to people than other tax issues, even though these regulations have a significant role in shaping the substance of taxation. Those who do participate are the wealthy, business entities, and the advisors to these groups.^[9] Furthermore, many of the people in government are close to those working in these areas who comment, and many have gone back and forth between government and helping these well-heeled interests.^[10] Thus, the regulations often take statutes that may already tilt in favor of these taxpayers and tilt them even further in that direction.^[11]

The range of people excluded from the discussions of tax administrative guidance is broad and varied. It includes people who bear traditional markers of disadvantage in our society, like the poor and racial minorities.^[12] But the voices of a broader swath of working and middle-class Americans also do not have their voices heard in the tax system. People in many groups have, thus, lost faith in the federal tax system, which in turn puts the voluntary compliance of filing returns in question.^[13]

The problems of the lack of democracy and the tilting of the tax system in favor of these other interests also pose risks for the state.^[14] Taxation is often a key part of state power.^[15] Furthermore, the most consistent contact point with the federal government for most Americans is in the federal tax system, whether through payments via withholding or annual filing.^[16] Taxation also has the power to enhance the democratic nature of governance or hamper it. When there is a democratic deficit in taxation, it also threatens the functioning of a democratic state and community.^[17]

This Article then seeks to discuss the issue of tax and democracy, and it proposes one intervention: providing grants to civil society nonprofit organizations to participate in developing Treasury Regulations and other administrative procedures.^[18] This focus is important because it is in these regulations that key decisions are made.

The grants would then allow these civil society nonprofits to build capacity in tax expertise. The grants can also spur new types of centers at academic institutions that focus on tax policy and regulations. Those groups can then serve as a counterweight to those well-off interests that have a voice in the process of generating regulations. Recipients can range from academic institutions to community groups to broad national organizations.

Additionally, the IRS and the Treasury should engage with the recipients actively throughout the development of regulations, starting with the development of the regulatory agenda through the notice and comment rulemaking process. This move can help push back against the various forms of capture and domination that exist in the tax system. It can also meld and assist other proposals that scholars have made, from improving the legislative process in taxation to greater judicial review.

While helpful, the grants are an incremental change. They do not solve the problem entirely. Rather, they move the needle in an important way that allows for voice. The grants will also be more successful in some types of regulations over others.

The proposal and this Article also join a growing discussion of improving democracy in taxation. It engages with work by tax scholars who have focused on trying to build a more democratic tax system and democratic theory within taxation. It also introduces new democratic frames into the tax discussion, drawing the concept of democratic equality and nondomination from others and highlighting recent work that shows the benefits of democracy.^[19]

This Article also adds to the current critiques of how tax policy is examined. Too often, tax theories focus solely on economic notions of efficiency. Yet, routinely encoded in these seemingly technical and objective metrics are deep normative value questions. This Article points toward trying to understand what the purposes of taxation and the tax system are and how they fit into the broader machinery of the state.

The Article proceeds as follows: Part II first uses the concept of democratic equality as an important framework for analyzing and combining much of the work on tax and democracy. It outlines how the process of developing Treasury Regulations falls short here because of issues like capture, which is a situation where powerful regulated interests bend the process and its outcomes to their desire.^[20] Part III outlines the specifics of the grant program and its operation. Part IV looks at specific types of tax provisions and explains the extent to which the grant program would help. In some programs, there is a strong likelihood of significant shifts. In others, the result is more modest. Part V then tries to develop a framework to analyze when grants will be most effective at affecting policy change in the direction of democratic equality. Part VI then focuses on the advantages and disadvantages of the program as a whole.

II. Democratic Equality and Tax Regulations

This Part provides the framework for understanding democracy in taxation. It creates the framework on the basis of the concept of democratic equality as developed by Professor Elizabeth Anderson. This framework captures many of the numerous strands of people discussing taxation and democracy.

It then turns to the tax policymaking process. Many people have discussed how the tax system fails on the dimensions of democratic equality. But an analysis of the development of Treasury Regulations is somewhat limited.^[21] This Part then also outlines why it is important to consider the development of tax regulations in assessing whether the tax system develops a notion of democratic equality. It then highlights why, even though tax has moved toward a more democratic regulatory development process, there are still numerous gaps in place.

A. Taxation and Democratic Equality

A growing number of scholars in taxation have started to discuss the ties between taxation, democracy, and equality. Many of these scholars have noted that the tax system, both in how it is created and the actual substantive results, undermines equity and democratic notions.^[22] But the tax system has significant democratic shortfalls in its creation, operation, and outcomes. It also produces results that reduce the equity of voices in other areas and can undermine other substantive equality goals. This Section brings into conversation Elizabeth Anderson’s concept of democratic equality. The goal is two-fold. First, Anderson’s theory serves as a useful shorthand for much of what scholars in this space raise. Second, it introduces into the tax law literature an important, but heretofore somewhat ignored frame. Furthermore, the theory moves away from the traditional focus of mere distributional outcomes for justice to outline that justice is relational and thus relies on democratic values, processes, and institutions.^[23] Thus, this Article will use democratic equality as its frame for these reasons.

Anderson’s concept of democratic equality was a response to troubling developments in egalitarian thought, mainly that of luck egalitarianism. But the development of the concept of democratic equality significantly enriched discussions about egalitarianism and tied it to concepts of liberal democracy.^[24]

Democratic equality is a response to traditional egalitarian theories, in particular luck egalitarianism.^[25] The concept of luck egalitarianism is essentially that “people should be compensated for undeserved misfortunes and that the compensation should come only from that part of others’ good fortune that is undeserved.”^[26] This distinction is often framed as the difference between brute luck and option luck. Brute luck is the undeserved fortune or misfortune, like being born with a certain health condition, and the idea is that it should be addressed by society mainly through redistributive social insurance.^[27] Option luck, like taking a bet on a company, should not be insured and leaves people to live with the consequences of the choice.^[28]

But there are some problematic logical conclusions of luck egalitarianism. On the one hand, it essentially abandons people with bad option luck and potentially allows them to sink into the depths of an underclass or be subjected to a paternalistic outcome.^[29] On the other hand, for those on the end of bad brute luck, luck egalitarianism expresses not compassion for beneficiaries, but rather a contemptuous pity for them.^[30] The difference is that “[c]ompassion is based on an awareness of suffering, an intrinsic condition of a person. Pity, by contrast, is aroused by a comparison of the observer’s condition with the condition of the object of pity.”^[31] The pity reaction, in turn, creates a subjugation in some ways of those who are suffering and, furthermore, creates in them a return expression of envy.^[32] Thus, luck egalitarianism undermines in many ways the sense of nondomination and equality that it seeks to create.

Instead, “democratic equality integrates principles of distribution with the expressive demands of equal respect.”^[33] The concept is based on the idea that while there may be differences in various people’s talents or virtues, there is an “equal moral worth of persons.”^[34] To reach the ideals of moral worth, democratic equality has two egalitarian goals. “Negatively, [it] seek[s] to abolish oppression,” while “[p]ositively, [it] seek[s] a social order in which persons stand in relations of equality.”^[35] Democracy is defined “as collective self-determination by means of open discussion among equals, in accordance with rules acceptable to all.”^[36] The precondition is that people must be “entitled to participate, that others recognize an obligation to listen respectfully and respond to one’s arguments, that no one need bow and scrape before others or represent themselves as inferior to others as a condition of having their claim heard.”^[37] Thus, it implicates a wide ambit of matters. It requires examination of outcomes, processes, material distribution, relationships, freedom, and dignity when addressing matters of the state.^[38]

Additionally, when it comes to the resources of a society and its distribution, democratic equality, as a theory, rejects the idea that the market distributions themselves are just a matter of fact. Instead, it notes that the entire economy is a result of “joint production,” which means that all things in the economy are “jointly produced by everyone working together.”^[39] Thus, democratic equality rejects the so-called “everyday libertarianism,” which supposes that the market itself exists outside of the state and the relations of society.^[40] Instead, the market and economy are embedded within society and based on the state itself, and thus, the claim over the entire holding of private goods does not exist.^[41] Therefore, having market power and wealth should not be a source of domination, because these goods come from the relations between people in society. Domination undermines the democratic ideals of people standing in relation to each other.^[42]

This theory has a few implications. First, it has a strong demand for equality of voice and access to participation. That means more than just equal voting rights, but ensuring that all levels of policymaking do not respond only to those who are wealthy or the loudest.^[43] It thus requires structures that encourage people to participate and to stand as equals in determining all aspects of policy, including taxation.^[44] Additionally, even if an outcome leads to a more egalitarian distribution, it might still be considered wrong if it is imposed without proper consent.^[45] Distributional requirements are interrelated with these notions of participation, nondomination, and equal respect.

Second, democratic equality does have a distributional aspect to it, but it is both narrower and broader than traditional views of distributive justice. At the base, it requires that society and the state provide access to a certain level of capabilities so that people can participate in all aspects of civil society, from politics itself to the market and communal endeavors, as equals.^[46] That, of course, includes basic material needs, but it includes more.^[47] It means that there must be access to other types of goods, like rights to political participation and the ability to appear in social situations without shame.^[48] It is more relaxed in that it allows for inequalities in income and wealth, but only to the extent that these do not form any basis of domination or a badge of dishonor.^[49] Any further attempts at redistribution beyond this baseline are fine, but they require more consent based on democratic engagement and dialogue.^[50]

Thus, when it comes to the tax system, democratic equality requires both procedural and substantive goals. Procedurally, it requires that people be able to participate as equals and have an equal voice over the structure of the system and its operation. Substantively, the system must aim at producing outcomes such that it can provide the means for people to access and develop the capabilities to act as equals in all aspects of civil society. Democratic equality focuses on access to the vital capabilities of individuals to participate in all aspects of civil society.^[51] It does then have a slightly weaker focus on distribution than Rawlsian or luck egalitarian theories, but also incorporates noneconomic matters like badges of honor and avoiding domination into its purview.^[52] In this way, then, the tax system itself must not serve as an oppressive mechanism or produce badges of dishonor on those who live in the margins. It also needs to be established in a way that allows the government to provide for the capabilities of people to function as equals in all aspects of civil society.

But, as noted below, the tax system fails in this way. It silences certain voices while privileging others in its creation. For example, large MNEs, the wealthy, and their advisors are often the ones who comment on proposed regulations and even shape them before a notice of proposed rulemaking (NPRM) is published.^[53] These forces are often also inextricably involved in the drafting of legislation.^[54]

Furthermore, the current discourse in taxation focuses so much on efficiency that many of these substantive goals of democratic equality are undermined.^[55] The result then is that substantive tax results in favor of these powerful interests, creating a positive feedback loop, whereby problematic processes lead to policies that further undermine the voice of those who are less equal.^[56]

B. Treasury Regulations as a Missing Piece

A great deal of scholarship has focused on numerous areas and found flaws in them as we view democratic equality. Many have shown how the legislative process excludes those who are less well-off, violating democratic equality’s procedural protections.^[57] Additionally, these procedural hurdles lead to a situation where the substantive aspects of democratic equality are undermined as well. By creating situations whereby the tax system favors the wealthy and does not raise enough revenue for government programs, it undermines people’s access to the fundamental capabilities to participate as full members of civil society. And by entrenching wealth, which has a badge of honor in our society, it perpetuates an inequality in status that democratic equality substantively rejects.^[58]

Furthermore, other scholars have pointed to how the procedures of audit and enforcement of the tax system do not treat people with equal regard. For example, recent news reports and scholarship have shown that the tax system systematically audits poorer taxpayers more than wealthier ones.^[59] And amongst those poorer taxpayers, even without race information, the tax system does discriminate against race, again violating the concepts of equal regard.^[60] Finally, the range of penalties also makes it difficult for those who are poorer to seek relief.^[61]

But one area has had less focus, and that is the development of the vast array of Treasury Regulations. As many tax practitioners know, often what guides what happens on the ground is not the Code but the set of Treasury Regulations.^[62] Indeed, while the Code is long and complex, the Treasury Regulations are even more voluminous.^[63]

Part of the reason is that, while Congress often does outline significant details in the Code, the Treasury and the IRS are left to fill in significant gaps. Additionally, there are even parts of the Code where almost everything is delegated to the Treasury and the IRS to develop.^[64] There are numerous reasons why this may occur. They range from the greater speed of the regulatory process as compared to the legislative process, expertise, the need for flexibility, a desire to allow administrators some control to make problems more tractable, and an understanding that there are unforeseen issues that may arise. But regardless, the result is a good portion of the tax system exists because of regulations.

But like other areas of the administrative state, just because the Treasury Regulations are often technical does not mean they are unimportant.^[65] Because Congress gives the Treasury and the IRS a wide range in determining the contours of the tax law through regulations, sometimes even deferring to their judgment entirely, these regulations are what make key policy choices.^[66] Furthermore, even if they are detailed implementations of what seem to be “big” statutory decisions, these details can often have a major effect on how these provisions come into being. The Treasury Regulations can thus encode values and support either the nondomination views of democratic equality or antidemocratic and domination values.^[67] By exercising regulatory power in a certain way, or failing to exercise it, the Treasury can harm those who are already on the margins and help those who are already expressing domination, like the wealthy.

For example, one way these regulatory details have major policy effects is through mechanisms like safe harbors—which protect those who meet certain conditions from agency challenges—and “sure shipwrecks,” which automatically deem anyone who crosses certain lines to be in violation of the rules.^[68] The idea, from Susan Morse, shows that laws sometimes have complex standards, but if conduct fits within certain bright-line buckets, the actor is either completely safe from sanction or subject to sanction.^[69] As Professor Morse notes, safe harbors and sure shipwrecks can have strong effects on behaviors.^[70] While Code sections do contain safe harbors and sure shipwrecks, many more appear in regulations, including Treasury Regulations.^[71] Furthermore, safe harbors and sure shipwrecks can also arise based on the various examples that appear in the Treasury Regulations.^[72] Creating safe harbors or sure shipwrecks in Treasury Regulations is not only a way of influencing behavior but can be a means through which the Treasury can give or take away from certain interests.^[73]

Thus, while it seems as though they are detailed and technical, regulations do a lot for the tax system. They are significant areas of policymaking and not mere technical implementations.^[74]

C. The End of Tax Exceptionalism

Since the 1970s, the tax system and other administrative processes have been separate.^[75] While much of administrative law questioned the notion of experts working in the public interest with public choice theory and its idea of regulatory capture, tax held onto an older view of experts working in the public interest.^[76] Tax regulatory development fell out of step with the broader trends in administrative law, particularly the judicial doctrines around the APA’s informal rulemaking procedures.^[77]

Kristin Hickman and others eventually pushed the idea that tax was not exceptional and rather should follow standard administrative law doctrines.^[78] Those moves bore fruit, and with the 2011 unanimous Supreme Court decision of Mayo Foundation for Medical Education and Research v. United States^[79] and other cases, tax law has more closely aligned with administrative law doctrines.

These changes to bring taxation into line with other parts of the administrative state procedurally seem to have some benefits toward the participation aspect of democratic equality.^[80] One would thus expect that with greater participation, both these new procedures would have helped increase democratic equality. But the story is more complex and less positive than one would want.

D. Capture by the Powerful

Regulatory capture complicates this story, and it works in numerous ways. Regulatory capture runs contrary to democratic equality because it privileges some voices over others.^[81] Those are voices that are already powerful.

This Section outlines how capture exists in the development of Treasury Regulations. It shows that there are traditional signs of capture in the development of Treasury Regulations, including back-channel discussions by powerful parties. But there are other, more subtle forms of capture that arise too: informational and cultural capture. Both of those present a unique problem that is difficult to solve just through a return to the status quo ante.

1. Traditional Capture

In the idealized view of notice and comment rulemaking, it is supposed to generate greater democratic participation. People can comment, and the agency is supposed to respond.^[82] But the result is not so cheerful. Instead, like many other areas of administrative law, the added processes have increased capture and led toward domination by the powerful.^[83] And in the tax context, certain other features make these problems even more likely.

Like in other areas of administrative law, wealthy taxpayers and MNEs are often able to talk to the Treasury and the IRS, not only during the formal notice-and-comment period, but prior to the promulgation of the NPRM, as shown in a study by Professors Shu-Yi Oei and Leigh Osofky.^[84] When these interests contact the Treasury and the IRS prior to the NPRM, their views shape the structure of the NPRM.^[85]

Then, after shaping the proposed rules, these interests, during the comment period, mainly comment praising the Treasury and the IRS for following what they suggested.^[86] These interests also tend to be the ones who actually engage in the comment process. Those with concerns regarding the structure of an NPRM only come in during the formal comment period, as the agencies did not consult those interests, which tend to be diffuse and are less powerful.^[87] During the comment period, Professors Oei and Osofsky show that those who challenge the views of the powerful interests that shaped the NPRM are treated as outsiders and somewhat pushed aside.^[88] In the language of democratic equality, they were not treated as equals in the discussion of a relatively important issue.

Additionally, one of the achievements of the move away from tax exceptionalism is to end the use of Temporary Treasury Regulations that never expire. But that action has led toward an increase in informal guidance.^[89] IRS Notices, because they skip around the formal binding effect of legislative Treasury Regulations under the APA, are often seen as a way to have the Treasury and the IRS move quickly. Unfortunately, there are significant democratic equality problems with this method. Informal guidance documents often do not have the same visibility to the broader public or even the formal ability to comment as Treasury Regulations do.^[90] While such guidance may be faster, it may not entirely avoid capture. Many of the same powerful interests could, because they are connected to the Treasury and the IRS and often are apprised of their actions better than the broader public or those on the margins, also provide input on these Notices. The lack of transparency and ability to comment then may actually serve to further undermine these Notices. And although they do not have the same legal effect as a Treasury Regulation, they can often create some lines that taxpayers may decide they do not want to cross, especially if the subject matter hits at those who are less powerful and well-off.

Thus, traditional capture, as discussed here, is a major democratic equality problem in the regulatory process. But issues like the rise in IRS Notices and these prior contacts to the development of the NPRM are even more problematic when other forms of capture are considered.

2. Informational Capture

The account above outlines a traditional view of agency capture. But there are other manifestations of capture that are more subtle. One of them is information capture.

Professor Wendy Wagner introduced the term information capture.^[91] Such capture occurs when concentrated and knowledgeable interests overwhelm the regulatory process with “[a] continuous barrage of letters, telephone calls, meetings, follow-up memoranda, formal comments, post-rule comments, petitions for reconsideration, and notices of appeal.”^[92] In regulatory spheres where there are a lot of technical issues, public interest groups are unable to participate effectively in these rulemaking processes.^[93] Because well-off interests can participate and flood with all of these various methods above, absent any filtering mechanism or incentives for finding balance, these powerful groups dominate.^[94]

Taxation fits this framework. Well-off interests here have the means and the incentive to continually overwhelm the system with their comments, data, and other information that the Treasury and the IRS must consider in the rulemaking process. They cannot filter it out, leading to a filter failure.^[95] Meanwhile, the broader public, who may suffer from the losses of revenue or see problematic redistribution matters, cannot comment effectively because they lack the technical capacities. They do not have the resources to commit to the process. They do not have the means or manner to engage the Treasury through not only formal comments, but also other avenues that these well-heeled interests have.^[96] The result, then, is a lack of transparency and a process that falls out of balance.

3. Cultural Capture

Another form of capture is even more problematic. People working to develop policies and regulations may still have problems listening and responding to voices that are different from their own, those of marginalized groups and others outside of their usual social milieu.^[97] These blinders can arise with the best of intentions and even if there were no other forms of capture around. For example, while removing the revolving door between government and industry could help reduce officials’ identification with powerful interests, nonmaterial matters can still influence regulators to favor certain powerful interests. This article adopts James Kwak’s term “cultural capture” to describe this phenomenon.^[98]

Cultural capture reveals how regulators’ views coincide with those of the powerful and diverge from a broader cross-section of the public. As noted above, in many areas, these elites underestimate people’s desires for more left-leaning and redistributive economic policies.^[99] Cultural capture helps explain part of this story.

Part of the issue stems from in-group identity overall. Those who are involved in formulating and implementing policy in government, by necessity, are those from the higher ends of the socio-economic spectrum.^[100] Thus, officials may feel more kindred with powerful interests.

Furthermore, many IRS and Treasury officials often have more informal social contact with those from powerful interests. They see each other frequently and attend meetings together. Officials have fewer contacts with those from a broader community, which helps foster a group identity aligned with more powerful interests.^[101]

Additionally, by going between industry or tax advisors for these powerful interests and the government and back again, there can also be subtle group identification, beyond material interests. They will feel like these people are their colleagues and perhaps even friends, and thus may subtly be more receptive to these powerful interests.^[102]

Many of these powerful interests are also higher status people in our society. Wealth and success in business are often seen as a sign of status, whereas government work is not seen as high status, especially at the line-level.^[103] These status differentials can lead to unconscious behaviors that result in deferring to, and adopting, the views of powerful interests.^[104]

Finally, relationships matter. As Professor Kwak observes, it is often harder to do something that harms someone with whom you have broken bread, even if equity considerations justify it.^[105] The greater visibility and frequency of interactions, the more these relational matters can lead to cultural capture. ^[106] Many of the powerful interests in tax are both visible to and frequent visitors of the officials in the IRS and the Treasury. ^[107] Furthermore, these people are in a regulatory or policy community with one another.^[108] As a result of these frequent interactions, regulators seek to avoid conflict with these powerful interests.^[109] As Sloan Speck has observed, the tax policy community, through relationships, can also spread certain interpretive views on the law from those working in practice into government.^[110] That may lead to the adoption of favorable rules and policies by the IRS and the Treasury, followed by what Professor Speck calls planning drift.^[111]

Cultural capture can also creep into other actors who are supposed to be above the fray. While they tend to do important work commenting on regulations and working with the IRS and the Treasury, bar associations, like the ABA Tax Section, can also subtly fall prey to cultural capture. While lawyers who work for private large law firms that advise MNEs and the wealthy are told not to advocate for their clients, such a pure separation is likely difficult.^[112] Even the best may have implicit biases in favor of clients.^[113] Furthermore, given the prestige that the advisors to large MNEs and the wealthy may have, they may be able to sway others in the room. Indeed, it explains why seemingly only one person decided to write separately against the tide regarding certain international tax issues because of this tilt.^[114]

Cultural capture is thus hard to address because experts cannot seal themselves off entirely from its effects. But cultural capture runs counter to the goals of democratic equality. ^[115] Much like information capture, though, interventions to address it require agency officials to develop new contacts with interests that are a bit more outside the norm and who may not be well-resourced or as technically adept.^[116]

E. The Lack of Judicial Review

Judicial review often serves as a means to control agency action, but in the tax setting, it is problematic. Indeed, many of the proponents for some level of tax exceptionalism cite the asymmetry in judicial review as a reason to treat tax differently than other areas of Administrative Law.^[117]

Generally, in other areas of Administrative Law, a series of judge-made doctrines interpreting the APA allow courts to strike down an agency action.^[118] But in order to get judicial review, there are two types of standing required. First, a party challenging an agency action must have Article III standing. Second, there is a need that the interest that the party seeks to vindicate through the challenge of a rule be one contemplated within the “zone of interest[]” of the statute in question.^[119] In many other areas of the administrative state, like in environmental regulations, these can often be met.^[120] But tax presents an odd problem.

As Professor Linda A. Sugin notes, standing doctrine generally prohibits suits by taxpayers unless that taxpayer has suffered an increase in their tax liability.^[121] Under the traditional dyad model, if the Treasury promulgates a regulation that directly affects a taxpayer by increasing their taxes, then they have standing to sue. But if the tables are reversed, and a regulation may be improper in some way, and it grants a benefit to one taxpayer, another taxpayer, who is harmed only by the generalized increase in their potential tax liability, cannot sue under the doctrine limiting taxpayer standing.^[122] The result is a ratchet that encourages regulations to provide benefits to taxpayers and discourages, perhaps, increasing burdens, even if there are positive outcomes to that for society at large.^[123]

The problem goes even further. As taxation moved closer to the rest of the administrative state in its regulatory promulgation procedures, the lack of judicial review of tax regulations that were overly solicitous to taxpayers became even more harmful.^[124] When all of these matters are combined, the regulatory and administrative guidance development processes tilt significantly in favor of wealthy and powerful interests, perhaps even more than the legislative process.^[125]

Finally, there is an additional problem here. Even if there were standing to sue to push back, there are questions as to whether it would even be fully effective. Obviously, it could help. But even if that were the case, as both Professor Wendy Wagner and Professor Jonathan Skinner-Thompson observe, much of the public, media, civil society, and community groups often lack the means and the technical expertise to participate.^[126] And judicial review only has bite if the comments made are significant and made with proper technical expertise.^[127] If they do not have the technical expertise, the agency can easily dismiss the matter or respond to it perfunctorily without doing the work of considering the implications.

When combined with capture, informational capture, and cultural capture, this lack of capacity to participate with some level of expertise also creates a problem in tax regulations. Even if there were somehow an expansion of standing doctrine, comments, and perhaps even pre-NPRM input are often necessary for shaping a regulation. But without technical expertise in this complex area, it is unlikely that groups that are not directly affected, MNEs, or wealthy people can get comments recognized to raise a meritorious issue on judicial review.

III. Public Grants

This Part develops an intervention to increase democratic equality in the tax system through the regulatory process. It can and should work with reforms to the legislative process, as well as other democracy-enhancing reforms.

It is a program of grants to go to civil society organizations that traditionally are not involved in tax policy to develop this expertise and connect with various communities and interests.

This intervention works well with other interventions scholars have proposed for making the tax system more responsive. Indeed, while an important intervention, it is enhanced if other reforms are undertaken in conjunction with this one.

A. Developing Civil Society Tax Capacity with Grants

The basic concept of the grant program is to give money to nonprofit civil society organizations to fund people and experts within them to advocate on tax issues before the Treasury and the IRS as it develops regulations or other administrative guidance. In doing so, it seeks to give voice to those who are often left out of the development of tax administrative guidance and to create conditions closer to the ideals of democratic equality. Providing capacity to such groups can also create a new set of intermediaries between certain segments of the public and officials at the Treasury and the IRS who formulate regulations.

A broad set of civil organizations are the target of these grants. One group could be standard local community organizations that have deep connections with their communities. Such a view is similar to the outreach for Technical Assistance Grants (TAGs) in the Superfund program.^[128] The goal would be to get comments and visibility on tax regulations and broader policy to a diverse array of communities. That diversity may come in the form of geography, socioeconomic status, race, ethnicity, and other forms of diversity. The idea would be to have some of these organizations employ someone to develop some facility in understanding taxation. These organizations can also serve as an educational function and as a conduit for IRS and Treasury officials to engage with members of these communities more directly.

A second set of organizations could be national civil society organizations that currently do not have tax capacity, but often are working toward similar goals as outlined in democratic equality. Many of these organizations serve as coordinating entities for some of the local civil society groups mentioned above. And many of them, while focused on issues like increasing democratic participation and creating a more egalitarian society, often do not focus on the tax system. Some examples of these organizations are groups like the NAACP and the National Urban League.^[129]

Many of these groups can add important missing voices. For example, if groups like the NAACP developed tax expertise, they could reach out to not only local community groups and push forward some of the problematic issues of race in the tax laws.^[130] Groups focused on women and on how tax interplays with the lives of many women who are the default caregivers can also provide valuable insight.

Finally, these grants can target a third set of organizations: academic institutions. Many of these institutions have tax expertise, and these funds can help them grow or expand programs and do more outreach to their local communities.^[131] For example, NYU recently started a Tax Law Center that partly seeks to get involved in some parts of the process of creating tax regulations.^[132] In some ways, these university-based centers can serve as places for broader and higher levels of tax expertise. More of these could expand throughout the country, providing a network of institutions that work in the public interest and that can also connect with organizations in the communities that surround these institutions. They can also serve as “watchers” with a broader lens and thus alert and convene other grant recipients and their experts.

Such matters are heightened when the tax system is used for many social policy programs. Often, many of those affected by these programs are those outside of the standard realm of tax discussion. Having a broader set of organizations aware of the tax system and with the capacity to monitor and comment on regulations expands the loop of people and interests participating in the process.

The grant program also heightens the salience of the tax system and its broad reach to civil society groups.^[133] Having such funds available could induce these organizations to start thinking about tax.

Furthermore, while the groups discussed above do lean toward the left end of the political spectrum,^[134] the grant program could also spur some conservative leaning voices that are often cut out of the process. Indeed, this program could also be used by some growing voices on the populist right to push back against some of these elite economic interests, allowing for some strange convergences between traditionally left-leaning groups in this particular area.

B. Analogs to the Grants

While initially this grant program sounds a bit unusual, similar programs exist in other regulatory spheres at both the federal and state levels.

One policy area where there are some forms of payment to encourage broader public participation in regulatory processes is the intervenor payment programs in rate setting for utilities.^[135] For example, in the state of California, which has one of the largest intervenor payment programs, the state public utility commission provides reimbursements to people and organizations that (1) face financial hardships; (2) participate in the rate-setting process; and (3) help to contribute to the final outcome of the rate-setting.^[136] The goal is to push back against capture in the rate-setting process, because utility companies can often capture the utility commission. Because the interests of ratepayers are diffuse and often do not have expertise, these funds have served to both pique interest and develop capacity to have additional views come to bear on the rate-setting process.^[137]

Different states have different programs.^[138] But well-designed programs yielded positive results. For example, in California, the payments have done a good job giving voice to important issues in these rate hearings. ^[139] Often, not only do they include pushback on the rates, but as political scientist Leah Stokes notes, they have also produced other policies in the electricity space like renewable energy mandates.^[140] Thus, the California program has generated greater participation, and when done right, encourages a wide array of people, leading to better outcomes both technically and in drawing out public values.^[141]

Another analogous type of grant to encourage participation are the TAGs in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), also known as the Superfund.^[142] CERCLA provides a mechanism to address the costs of remediating areas with toxic waste. The EPA and other parties are supposed to include affected communities in the decision process.^[143]

But, as noted by Professor Skinner-Thompson, many communities lack the capacity to address the highly technical issues involved in commenting on CERCLA matters.^[144] The TAGs are given to nonprofit community organizations.^[145] These organizations can then use this money to both develop a technical understanding of what is going on and have the capacity to introduce useful comments in the process.^[146] The program, of course, like the rate-setting intervenor payments, is not perfect.^[147] But TAGs provide another example of how such programs can work well to catalyze greater public involvement with often more equitable results.^[148] Furthermore, TAGs, like intervenor payments, also help increase trust in, and the credibility of, the decision-making process and overall system.^[149] Indeed, Professor Wagner herself points to such an idea in addressing information capture.^[150]

While these two areas of the law have developed these grants, there are currently no grants that seek to assist civil society groups in any part of the tax regulatory process.^[151] Of course, there are differences between tax and these other regulatory areas. One of those differences is that the array of nonprofit civil society groups must be larger. The tax system is a mass tax system. Even at its most basic, it touches the lives of almost all members of the democratic community. Most people are subject to taxation in some activity in their life.^[152] Taxation is also key to the redistributive system of income and wealth in the United States.^[153] It is a matter then of concern for all members of the democratic community. Taxation and the funds used from it are necessary to establish the baseline to allow people to participate fully as equals under democratic equality ideas. Furthermore, additional redistribution beyond even those needs is allowed so long as they are agreed to as people standing as equals according to a proper decision rule.^[154] That said, having analogs in other areas provides some basis for the program.

C. Program Design and Administration

Program design and administration are important. The program must hit a certain sweet spot. It should not encourage voices that already have significant access to increase their volume, but grant applications must be streamlined enough for smaller and less resourced organizations to apply for them easily. It also needs to seek to find ways to prevent capture of the organizations.

1. Organization Types and Governance

Perhaps most important is to create a limit on the types of organizations that could apply for these grants. The key is to allow a wide array of organizations to apply, but to limit them to nonprofit entities under I.R.C. § 501. There should also be certain governance measures that limit the potential for undue influence in the organization’s key governance documents.

Limiting the grants to nonprofit organizations allows for a wide variety of groups to receive these grants but excludes the key sets that already have a voice. Currently, large and even moderately sized for-profit entities have significant voices. Through themselves, trade associations, and their advisors, they know and can participate relatively well in the tax regulatory process.^[155]

Many of the organizations targeted in the discussion above are already nonprofits under I.R.C. § 501(c), and many are 501(c)(3) organizations.^[156] Such groups include those involved in economic advocacy, universities, and community organizations.^[157]

But even still, nonprofits participating in the grant program could still fall under the influence of a wealthy person or a set of entities. One useful way to limit this effect is to require organizations, as a condition of grant receipt, to adopt a provision in their by-laws that limits the overall donations from any one source in terms of the percentage of their revenues. This provision can prevent capture by stopping these organizations from being beholden to any one entity. Such a rule is not unusual. Indeed, 501(c)(3) organizations that are public charities must show that they rely on support from a broader set of donors.^[158] The difference is that the by-law structure provides a brighter line, more ex-ante test than analyzing donor lists.

Finally, while there is a limitation on 501(c)(3) organizations’ participation in political activities, there may be ways around that rule. First, these are not partisan activities of supporting a candidate or directly lobbying Congress.^[159] Rather, it is the participation in the administrative process, which may be fine under current rules. ^[160] Furthermore, Congress could carve an exception under the statute, or the Treasury and the IRS could, if they have the authority, carve matters out in a regulatory way.^[161] Many organizations could also be organized into another type of 501(c) entity that allows for more political activity. Indeed, many well-known organizations have both a 501(c)(3) entity for certain operations and a related non-501(c)(3) nonprofit for their political activities.^[162]

2. Limiting Grant Sizes

Another way to help limit the matter is to limit the size of any award to an organization. Since the goal here is to develop some technical expertise in these organizations and raise the salience, many of the grants could be smaller, funding one or two employees in the organization. Most of the grants, then, can be limited to that range based on factors like labor market dynamics. These grants should then follow the streamlined application process discussed below. A few organizations, like perhaps educational institutions and more national groups, could have larger grants.

There are two reasons to limit the size of the grants. First, as a matter of course, the greater the number of organizations that get grants, the broader the base of commentators and viewpoints that are expressed. Many of these organizations may produce the same recommendations. But they can help connect to information and stories in their networks, which will differ to bolster their actions here.

Second, limiting the size of even the largest grants would help to limit the types of organizations that apply. Many organizations with a great deal of funding for business entities or the wealthy that may seek to get these grants will likely find some of the application process and transparency, described below, as not worth the cost of applying.^[163] For many of the more national organizations, though, applying for such grants from foundations or the government is often a large part of their work. ^[164] Such a move here, then, also aids in preventing the capture of grant recipient organizations by such interests.

Thus, limiting the grant sizes overall to mostly smaller grants and to a few slightly larger grants forms a key structure in the program.

3. Grant Application Process

Another way to strike a good balance is to tailor the application process to two factors: the size of the organization’s budget and the grant sought.

For smaller organizations receiving the smaller grants, keeping the application process relatively streamlined is important. Many of these organizations do not have the capacity to undertake complex applications. While they may keep a list of donors, many of them likely will not have the ability to handle complex financial documentation. Here, it would be sufficient to show some of the governance matters in the by-laws regarding not taking too much money from any one source in their donations.

On the flip side, larger groups, though with larger overall budgets, have greater capacity for detailed applications. Such applications should require not only a standard application and budget, but also include an outline of who are the ultimate funders of the organization. The goal here is to make it somewhat harder for these applicants to be captured by one particular for-profit entity or wealthy person. These organizations should then be required to trace the funds to ensure that money is not moving through shell entities for their donations and certify to that fact. Such a move can give bite to the requirement in the by-laws outlined earlier.

This then suggests a two-tiered application and reporting process. Such a process is not particularly unusual. Almost every nonprofit organization must file an annual return with the IRS known as Form 990.^[165] The amount of information and detail required, though, varies based on the size of the organization’s revenue. Here, the size of the grants and the size of the organization’s revenues can also serve as a proxy for having the more streamlined vision outlined above or a more detailed version.^[166] Furthermore, many of the pieces of information that would be required for the higher-tier grant applications are already information that nonprofits have to report in the returns they file with the IRS.^[167] Thus, even for the larger organizations, the burden may not be that significant.

Thus, having a tiered system of application requirements can help to aid the goal of getting the funds out to organizations to build the capacity and to have some controls on them.

4. Public Listing of Recipients

Finally, there should be a public listing of these grant recipients. There are two key reasons for listing recipients: oversight and connections.

Obviously, a public listing of grant recipients can help in the oversight. It allows the press and the public to see who the recipients of the grants are. ^[168] That allows them to see, too, if many of these organizations are captured. Often, such scrutiny can also serve as a deterrent to some organizations representing the well-heeled that often want secrecy.

The other effect of a public listing is to allow the organizations to form connections. Organizations can collaborate with each other and draw on each other’s knowledge and networks of those whom they serve. The goal would be to serve as a force multiplier for their comments on regulations. Many of them may have similar ideas, but they could work together to deliberate how best to get to the result that serves their many constituencies. They could also work on deliberating together, even if they have slightly different views, to aid in the development of better outcomes. And they could leverage the different resources and connections they have to produce better information for the agency. Forming connections can help spur additional conversations and learning from each other, thus assisting the goals of increased participation.

These basic structures can help ensure that the grant program reaches out to a broad array of organizations representing numerous voices to participate in the development of tax policy, particularly at the regulatory level. The question is then how to work with and engage these voices.

D. Engaging Grant Recipients

The grant program requires consistent engagement with these grant recipients. The idea here is that consistent engagement through the development of administrative guidance is twofold. It provides the recipients with contact points, and it alerts the recipients as to when the Treasury and the IRS are considering any sort of administrative guidance.

First, the IRS and the Treasury should actively engage these grant recipients for their views. Such engagement should occur not only at the point of notice and comment rulemaking, but before that. Often, decisions happen even before an NPRM is issued.^[169] Frequently, too, the IRS and the Treasury set priorities for which regulations to adopt.^[170] Having this type of engagement with these players consistently is important because, without it, there is nothing to push back against regarding regulatory blind spots. It also helps to reduce some of the cultural capture. It makes the agencies more aware of what they are missing and perhaps even pushes back on some of their underlying assumptions.^[171]

Second, the Treasury and the IRS should do more outreach to alert grant recipient organizations of pending guidance, especially if they are considering developing an NPRM. The goal is to give these organizations notice of future policy action that many well-connected, wealthy people and large MNEs currently have. For example, the Treasury and the IRS could talk to these organizations about guidance projects they are planning over the next few years and their priorities. This act could help reveal potential blind spots in the process. Here, they can help in the development of the groundwork of regulations rather than waiting until the comment process, where sometimes, as revealed above, the matters are a bit of a fait accompli.

The Treasury and the IRS should seek to engage with grant recipient organizations throughout the formal notice and comment process. For example, the Treasury and the IRS should ensure that the organizations that comment on their views receive an actual, detailed response rather than pushing them off as unsubstantial. This goal, of course, should be aided by the fact that the whole point of the grant program is to build capacity and expertise within these organizations. Moreover, this will put the onus on the Treasury and the IRS to take what they say seriously and respond to their comments.^[172]

Additionally, such engagement could also help improve subregulatory guidance too. If the problem with regulations is that often these views are not heard prior to the promulgation of an NPRM or during the notice and comment period, informal guidance is even worse. Often, the only players who can informally weigh in here are those powerful interests. By engaging, the Treasury and the IRS are more likely to get a diversity of views to consider when promulgating nonbinding, but often important and useful, informal guidance.^[173]

Thus, there are important parts that should be built in, both in law, practice, and grant management, that should aid in increasing participation.

IV. Regulatory Examples

While the goal of the grants is to encourage organizations to produce wide-ranging comments on numerous types of regulations, certain tax areas are more likely to induce grant recipient participation. This Part uses some examples to predict which provisions of the program would have the greatest effects. But the key is that even where efficacy is lower, it is still an improvement from the status quo, where there is often no voice.^[174] It then uses these examples to create a framework to predict the level of efficacy, as discussed in the next Part.

A. The Low-Income Housing Tax Credit

The Low-Income Housing Tax Credit (LIHTC) is an area where some of these groups can likely sway some of the regulations put forward by the IRS and the Treasury.^[175] The program serves as the largest source of federal funds for supply-side interventions in the rental housing markets.^[176]

The Treasury and the IRS jointly administer LIHTC with the states. In general, the federal government provides nonrefundable credits to finance the development of rent-restricted rental housing.^[177] States then create plans based on some of the federal guidelines and their needs.^[178] The goal is to create units of such rent-restricted housing for a relatively long period of time.^[179]

LIHTC has had some significant criticism for failing to meet key housing needs. For example, the program is criticized for a lack of oversight by the federal government.^[180] It has led to issues like high overhead costs, hardened residential racial segregation, and limited options for families who want to move to places of greater intergenerational mobility.^[181]

While the LIHTC statute is often quite detailed, there are also numerous regulations. Some of these regulations do parrot back statutory language, but much of the work they do is to fill in the important details about the credit’s operation and how projects determine credit amounts.^[182]

Presently, LIHTC has a broad coalition of support from developers, financers, housing advocates, syndicators, and state housing finance agencies (HFAs).^[183] But given the problems outlined above, it seems as though many community organizations, and a broader array of groups representing renters, are still missing from the discussion.

Providing more renters’ organizations with grants would allow them to work on commenting and getting involved in any additional regulations in this process. They could work with the Treasury and the IRS to push back against proposals that are perhaps too favorable to for-profit developers or syndicators. They could help to comment and work with the Treasury on regulations involving HFAs and Qualified Allocation Plans (QAPs), which are the plans that outline what kinds of projects will receive LIHTC funding. There can thus be better regulations for QAPs that encourage maximum flexibility in housing placement—balancing units between existing communities with many lower-income renters and areas with greater intergenerational mobility.^[184]

A major reason these grants would likely succeed and defend against traditional, informational, and cultural capture is that groups representing lower-income renters already exist.^[185] Indeed, over the past few years, such groups have been growing. In addition, allowing for comments on regulations for LIHTC could help address the residential racial segregation issue, and thereby attract both local and national civil rights organizations. Because they are engaged on these issues, and because many of them are also wary of too much going to financial interests and developers, they can serve as effective pushbacks. Furthermore, these groups can serve as sources of information for the IRS and the Treasury on the on-the-ground effect of the statute and regulations, as well as other programmatic aspects. And should the IRS and the Treasury decide to coordinate with HUD in managing the program, many of these organizations engage with HUD and can serve as a useful point of connection in that coordination effort.^[186]

B. Opportunity Zones

The OZs program is an area where the grants could still have a strong effect on the outcome.^[187] That said, it may be more muted than LIHTC.

Congress created the OZs program in TCJA 2017.^[188] But the program has significant bipartisan support. Indeed, the originators of the program are a bipartisan duo of Senator Cory Booker (D-NJ) and Senator Tim Scott (R-SC).^[189] Although some have critiqued the program as fundamentally flawed, given the strong bipartisan support, reform is important.^[190]

An OZ is a census tract that is either low-income or adjacent to one, which a state’s governor designates as an OZ.^[191] The Treasury then examines to make sure these conditions are met.^[192] The general rule with OZs is that investments in property or businesses located there receive deferred gain, or if held long enough, elimination of the gain.^[193]

The goal was to spur equity investments to revitalize these areas to create jobs and new businesses that served these communities.^[194] But that is not what happened. As it stands, the OZs program shows significant signs of the various forms of capture mentioned earlier.^[195] Numerous projects receiving OZ treatment were already planned prior to the law coming into force. Many of the projects, too, are of dubious community benefit. And some designations by governors seemingly passed to Treasury approval without any additional scrutiny as to whether state officials were helping some politically connected people.^[196]

But there can be some ways to work with the flawed program to benefit these communities. As noted by Tracy Kaye, having community involvement and leveraging the OZs program with other programs like LIHTC, project-based outcomes can be better. Indeed, there is already an existing framework of such community organizations that could serve as consultants for certain projects.^[197]

Zooming out to the regulatory environment, similar to LIHTC, the statute is relatively detailed. But key matters of financing and program operation are designated to both the states, the Treasury, and the IRS to manage and gap fill.^[198] While community groups and nonprofits do have some capacity to engage in some of the on-the-ground discussions, many of them likely do not have the capacity to focus on rules and work with the Treasury to improve overall program design through the promulgation of new guidance and regulations. The presence of the grants here overlaps and builds on existing interests and capacities of these groups. They can thus also work toward creating a regulatory environment for the program that is more likely to ensure that the benefits of OZs flow more toward their communities rather than as a tax protection strategy for the wealthy.

The reason, though, why OZs may be more muted than LIHTC is that the connection between the tax program and the problem itself is a bit more attenuated. LIHTC is geared toward a particular good outcome: increasing the supply of lower-income rental housing. OZs are a bit harder. They are about investments within certain areas to encourage economic development. Unfortunately, that outcome itself relies on multiple steps to work out. It not only requires location in the area and community support, but also requires some sort of enterprise to generate a profit. It is thus reliant not just on investors and communities, but also on the people who run the various businesses that OZ money funds. Such attenuation, then, may make it harder to determine what exactly to advocate for in the regulations. Indeed, it would require expertise not just in tax, but also in other areas of expertise to work. Unless the community organizations also have that capacity, which granted some of them do, they may not be able to use regulations to help improve OZs.^[199]

C. Transfer Pricing

Transfer pricing likely represents an area where the effects of the grant program are more attenuated, but if targeted correctly, it could still make an important, if marginal, impact. Transfer pricing is the term used to describe the allocation of income between a U.S. entity and a commonly controlled entity in a foreign jurisdiction. The statute itself is relatively bare, only three sentences long.^[200]

The regulations, on the other hand, are enormous.^[201] Under the regulations, the fiction of the concept of separate entities is kept alive. Instead, the regulations adopt the international norm of the arm’s length standard.^[202] That is the idea that determining the price paid for a particular good or service provided by a commonly controlled entity must be the same as the price two uncontrolled parties would set.^[203] The regulations outline various methods for determining such a price. These regulations are detailed, and these details are often where key choices get made. They also interact significantly with other areas of taxation that address commonly controlled entities across international boundaries.^[204] And the regulations contain examples and other matters that are safe harbors and sure shipwrecks in them.^[205]

Part of the reason why the effects of the grant program here will be more limited is that the bite of these regulations, and how they affect people, is more along the lines of if these entities do not pay tax, then each person or business in the United States must pay a little more. The harms are diffused, and the benefits are concentrated among MNEs. Furthermore, the regulations are fiendishly complex. This complexity and the lack of hooks into preexisting interests hamper some of the effectiveness of these grants.^[206]

But there is one reason why some greater activity in participating in regulations could arise. That is because the issue is one that fits with both current and longstanding Zeitgeists to tax large MNEs. Over the past few years, broader sets of people have expressed outrage as to how many companies have sought to escape any taxation on their income through using transfer pricing and other techniques.^[207] A long-standing view, too, in taxation is to avoid taxing the regular people and small businesses and hit these large corporations across the sea as a source of revenue.^[208]

Transfer pricing, thus, could serve as a surprising locus for engagement. Providing some technical boost could at least move the needle a bit or provide a means of critique. Some groups interested in overall distributive justice could get involved. Additionally, groups that represent smaller business interests that are put at a competitive disadvantage by large MNEs’ access to transfer pricing and other international tax planning techniques may play in the game.^[209]

Furthermore, here grants to start groups that research matters at various law schools and universities around the country could also help. Many of these groups, unlike the think tanks in D.C., can also serve as anchors to their states and local communities. They may provide valuable perspectives from their communities, along with enhanced expertise. Funding these programs with some of the larger grants could also move the needle on the transfer pricing matter.

It should be noted that these moves will not be sufficient to transform the regulatory process of transfer pricing into something that is fairer or reaches key democratic equality goals. But like much of what the program seeks, these moves make a marginal push.

D. I.R.C. § 199A

The matter of I.R.C. § 199A and its regulations represents a traditional capture story. Unfortunately, it seems that in this instance the grants would have limited effects on the outcomes. That does not mean that the grants should not be done, but the probability of a significant, if marginal effect, is even lower than that in transfer pricing.

I.R.C. § 199A, in general, provides a deduction of 20% of qualified business income (QBI) earned through a pass-through entity like a partnership or an LLC outside of certain specified areas.^[210] The idea behind the deduction was to give owners of these pass-through entities the “same” tax relief that C-corporations received with the reduced tax rate in TCJA 2017.^[211] But the problem, at least from a policy perspective, is that there is no real reason to have this difference.^[212] If people really wanted to take advantage of the changes in how entities are taxed and reduce the effective tax rates on their investments, they could always change their entity’s form from a partnership to a corporation. Without rhyme or a good policy reason, the creation of I.R.C. § 199A opens the door to means by which wealthy people can shift their income into partnerships or other passthrough entities, and receive a lower effective tax rate than one would want.^[213] To prevent some of these, the statute created a complex, if somewhat problematic, set of anti-abuse rules.^[214]

The statute is complex, and the regulations themselves are even more so. As noted by many commentators, while the statute is a large giveaway to wealthy interests, the regulations give even more away to these groups.^[215]

While some of these groups may oppose such giveaways, they are actually far more hidden than even what happens in the world of transfer pricing.^[216] That is partly because the story is different. The 20% QBI deduction actually does not ring in the same way as a giveaway in the tradition of companies shifting their money overseas to escape taxation does.^[217] While transfer pricing is at a deep level complex, the top line is simple, as the statute itself shows.^[218] I.R.C. § 199A, on the other hand, is complicated. It does not have anything like a nice zinger of taxing corporations across the sea. It thus lacks a certain salience.

That said, this marginal effect is better than what we currently have, which is no voice in opposition to the I.R.C. § 199A giveaway. For example, having groups activated along the lines of following the development of the regulations could have added greater pushback against the Treasury’s desire to promulgate rules that were overly taxpayer-friendly. It could have tipped the balance by creating more well-designed comments against these rules that were more generous than even Congress likely wanted. These groups could then help stiffen the spines of the government in crafting stronger anti-abuse and broader sure shipwreck provisions. Additionally, adding voices of more experts who focus their time on responding to regulations with an eye toward opposing the interests of the well-resourced can provide additional information here. Having the Treasury actively engage with experts who may represent these other viewpoints and who have access to different networks and communities could also help temper some of their cultural capture.

V. Framework for Efficacy

The examples in the previous Part help point to a set of frameworks that can outline when the grants can be most effective in swaying outcomes. This Part of the framework, with the proviso that, overall, the creation of the herein proposed grant program is still an improvement over the status quo even on areas where the intervention is less effective.

A. Extant Interest Groups

Under standard ideas of public choice theory, involvement and regulation often happen when there are concentrated benefits and dispersed costs.^[219] In some of the instances above, the tax provisions at issue have concentrated benefits to certain groups, and there are groups already organized around those issues. Here, the grant program does a great deal of work for relatively little effort because it simply pushes matters over the edge.

Thus, a good sign for when a grant program like this would help is if there are already groups organized around a key issue that is front of mind. Many such instances are areas where the tax law overlaps with other matters of social policy, like in the situation of LIHTC, OZs, or income support programs like the earned income tax credit and the child tax credit.^[220] There are groups that already advocate in these spaces, and these tax programs help to benefit certain groups with specific needs.^[221] What is often lacking is a means by which such groups can effectively engage the IRS and the Treasury.^[222] These groups also lack the capacity to discuss the tax matters deeply.^[223] In some ways, the grant here then serves as a flip to proposed agency coordination efforts between the Treasury and the IRS and other federal agencies working in these spaces.

Additionally, for groups that are more economically heterogeneous, like an NAACP or NCLR, if the tax issue aligns with key group goals, then the grant is more likely to help.^[224] Many of these groups, while they would welcome a tax analyst, have to answer to heterogeneous member concerns.^[225] There is also a limit as to the number of Treasury Regulation matters that a few people involved in tax work for an organization can undertake. When there is alignment with the general mission of these organizations, though, it makes it more likely that the capacity that the grant funds turn towards engagement with the IRS and the Treasury.^[226]

On the other hand, there are fewer organizations seeking to increase taxes on MNEs or raise taxes on the wealthy.^[227] Groups that care about class issues, like pro-labor entities, are unlikely to weigh in on these issues because their interests may not be aligned. While there is often a tendency to put labor and capital in opposition, labor really cares about protecting the incentives it has for itself and sometimes reducing taxes if it can increase worker power and wages.^[228] Perhaps groups that exist around economic justice more broadly may care here, because reducing the wealth of these entities through tax is another way to reduce their power, potentially. But there are not many of these groups that exist. And even if such groups exist, they too will have to prioritize their comments, even if they get a person funded to track tax actions.

B. Direct Effect of Regulatory Changes

This condition is related to the one above, because it too stems from the learning in public choice theory that participation and stakes in regulation are higher when benefits are concentrated, and costs diffuse.^[229] The notion is that participation is more likely and the grants thereby more effective if the groups receiving them see direct effects of their input into regulations as opposed to theoretical benefits.^[230] While the previous factor focused on whether there is an existing institutional structure, this matter is about stakes.

If groups find a strong connection between the regulations and the on-the-ground outcomes about which they care, they will be more likely to participate. This distinction helps to then explain why, for example, the LIHTC is more likely than OZs to have regulatory participation by groups. While OZs and LIHTC share a lot of similarities as place-based incentives meant to help lower-income people, the direct effect is different.^[231] LIHTC funds specific housing projects in a clear way.^[232] OZs, on the other hand, do not directly fund businesses but rather create incentives for capital to flow into areas to create business investments.^[233] The effect, then, is a bit more removed from those on the ground. They do not always see or know what is funded by an OZ or whether jobs are created by the OZs program’s incentives.^[234]

Even on issues related to business taxes, having a direct effect is important. Changing the rules around transfer pricing and tightening them has a relatively direct effect on whether MNEs pay any tax.^[235] Stricter rules put in place would limit income shifting. On the other hand, rules around QBI likely have a more attenuated effect on matters of overall income distribution or an understanding of whether wealthy people who own passthroughs are paying enough tax.^[236] After all, QBI interacts in odd ways with other regimes that provide major benefits to those wealthy capital holders.

C. Issue Salience

Issue salience is also something important that can make the grants more likely to succeed. Salience in tax parlance has numerous valences.^[237] Economists and other tax scholars talk about tax salience as whether people know that they are taxed.^[238] For example, a consumption tax not added in the price displayed, like it is with most U.S. sales tax, is less salient than one already included in the price, as is the case for most European VATs.^[239]

But salience here is not whether one knows that they are subject to tax when deciding to undertake an action or transaction. Instead, the salience, defined in this instance, focuses on whether the broad issue is one that touches public consciousness.^[240] The more salient the particular tax issue, the more likely that providing a grant to boost capacity will lead to some level of engagement and intervention.

Salience is connected to the other factors in the framework. For example, if a tax provision overlaps with another policy area where groups already exist or there is an easy-to-map direct effect of the tax policy on a certain community, then it is salient. But salience as a matter also has a broader reach. Issue salience in this framework can be used to capture whether the tax provision is at the front of mind. In a dirtier political sense, it is whether one can easily tie it to matters in the news, a sense of fundamental unfairness, and the ease of making it a slogan. All of these make the issue stick in the minds of the public and are more likely to get organizations interested in these matters.

Issue salience can also be time-dependent. Well-placed reports that cause a level of public outrage can help increase the salience of an issue, and thereby make the issue more worthwhile for people. For example, a great deal of reporting by organizations like ProPublica has pointed out how the overall regulations and structure of the tax system have, in certain ways, undermined egalitarian values.^[241] They have pointed out how MNEs have avoided paying taxes in any jurisdiction.^[242] These and some social movements have brought back the old idea of MNEs not paying their fair share and the adage of not taxing you or me but corporations across the sea.

Thus, it is here that the transfer pricing and broader international-related tax issues around MNEs could gain traction. There has been a growing awareness that something is amiss here, as large MNEs pay no taxes in either the United States or any other jurisdiction.^[243] Furthermore, there are also adages and some slogans around the issue like, “Don’t tax you, don’t tax me, tax the corporations across the sea,” and that we should not give tax breaks to companies that ship jobs overseas.^[244] Granted, the issues here are fiendishly complicated. But the issue salience here creates energy to engage.

This differs from many other business-related provisions. Many of these other provisions, like QBI, have not had the kind of sustained, broad coverage in the media.^[245] They are harder to pinpoint, because while the beneficiaries of some of these international provisions are well-known and profitable MNEs, the beneficiaries of § 199A are perhaps a bit less well-known.^[246] Additionally, in many ways, provisions like § 199A do not have the same zing or hit into well-known cultural touchstones as taxing companies across the sea. Indeed, they can sometimes even get framed as helping local communities.^[247] As a result, they have lower issue salience.

D. Group Coordination

One final factor that can help lead toward success is whether these groups form networks where they can coordinate.^[248] In fact, this factor could help provide some marginal success with these even if a tax provision does not have any other factors in its favor.

This type of group coordination could happen in various ways. For example, there may be grant recipient organizations across various issue areas and a few that are more generalist, like academic institutions that set up tax centers. Under this view, if these academic institutions know where there may be gaps, they can coordinate to fill these gaps.

Furthermore, coordination can happen horizontally as well. For example, within LIHTC, one person within a renters’ advocacy organization probably could not address the world of potential regulatory changes at the federal level. Distributing across and working with other organizations can provide an additional bang for their buck. Similarly, too, even a well-resourced tax regulatory center likely could not fill every gap here on its own. But the grants, by serving as a seed for new sprouts of such organizations across the country at various institutions, can create a network that can distribute work or highlight provisions that may have greater local import. Thus, these types of opportunities to coordinate can also serve as another part of this frame to push toward success.

VI. Benefits and Pitfalls

Creating these grant programs has some significant benefits to increase democracy in taxation. But there are also some potential pitfalls.

This Part focuses beyond a framework for predicting efficacy to the broader and more general benefits and pitfalls. It opens with some critiques of other solutions. These other solutions have a gap that this grant program can help fill, or the grant program is actually not squarely within its critique. It then discusses the more generalized benefits and responds to the pitfalls of the program.

One should note that this intervention is one of a series of changes that would help. The focus on regulation is intentional, but changes at the legislative level are important as well.

A. Problematic Solutions

Two solutions are often given toward addressing the tilt in the development of tax administrative guidance. The first is to restore the reign of experts acting alone.^[249] The second relies solely on trying to find ways to provide judicial review.^[250] But these moves are perhaps incomplete. They do not effectively address either the changes in law or the culture, and they alone are ineffective at achieving the goals of democratic equality in the regulatory process.

1. Return to Expertise

One of the most common discussions amongst people in taxation is to call for a return to the old order of expertise reigning.^[251] In the strongest view here, tax would no longer be subject to the APA.^[252] Here, regulatory preambles would be cursory. Notice and comment would be limited, as would the responses. There would be no hard look review to ensure processes are done. We would just have public servants acting in the public interest making everything.

The idea has appeal. We can have the state move fast. We can do more to protect the public fisc. We can just cut out and ignore powerful interests and work for the people.

But this strong view of the return is impractical and does not really solve the problems. First, the restoration of a stronger expertise does not solve the issues of informational capture or cultural capture. Indeed, it may have the opposite effect, given these forms of capture. Instead of bringing back the public good, it may lead toward greater influence by powerful taxpayers, because broader public access to commenting or getting involved in regulations is cut off.^[253] This view also runs directly counter to the ideals of democratic equality’s procedural requirement to allow people to participate in the process as equals.^[254]

A second issue, related somewhat to the notions of informational and cultural capture, is the fact that expertise today often means expertise in a certain dimension. As Professor Rahman notes, during the Progressive Era, with thinkers like Brandeis and Dewey, expertise was often linked to the conception of broad participation.^[255] But since then, proponents of the administrative state have adopted a view of managerialism, which has a thinner ground of using expertise in the public interest to make markets more efficient.^[256] When public choice theory came along, this managerialism became chastised and smaller.^[257] It turned into a more minimal state action and a greater focus on the science of the market.^[258] That, in turn, led toward an efficiency-first view.^[259] The problem then of returning to full expertise is that we cannot entirely turn back the clock to the New Deal, Landis-type view of the state itself. And indeed, the experts have absorbed this new chastised, efficiency-first, managerialism.^[260]

This type of chastised managerialism runs counter to democratic equality. By focusing so much on economics, other important nonmonetary and dignitarian aspects of the tax system in general are lost.^[261] And again, because equity issues have a feel of being more subjective as opposed to efficiency metrics, there will continue to be a tendency to give efficiency first among equals treatment.^[262] A refocus on expertise as the main driver then does not sufficiently push back on this view.

Finally, often experts alone cannot see everything, and having a process that brings in diverse viewpoints can help the system.^[263] Frequently, experts miss various forms of systemic risks or other problems. For example, in the tax system, many experts may miss issues like disparate effects on minorities, especially since they may lack the data or think that these issues are not relevant in a colorblind tax system.^[264] But that too may undermine the ability of the system to respond and address pressing issues in society that tax itself touches.^[265]

There is also a weaker version of this advanced by many thoughtful people in administrative and tax law, like Nicholas Bagley, Brian D. Galle, and Stephen E. Shay. The goal here is to stop fetishizing procedure as an end in itself.^[266] They note that it does not aid in the legitimacy of the institution.^[267] Instead, results are more important.^[268] They show that more procedures often lead to greater risks of capture, given that organized and wealthy interests who have concentrated losses or benefits are better able to organize and gum up the process.^[269] That leads to ossification.^[270] These interests can capture agencies more easily or wear them down.

But it is important to note that rather than essentially eliminating all procedure, these scholars are calling to rethink and retool. Some of these procedures should fall away. But there should be a retooling that focuses on quickly achieving the public good in the regulatory process in a way that benefits diffuse and silent interests.^[271]

This critique of proceduralism is not opposed to the proposal here. Rather, this proposal is orthogonal to the grant program and its aims. The critique of proceduralism is that more procedure not only leads to ossification, but procedure itself does not address capture nor lead toward democratic equality.^[272] That said, these critiques also do not seem to be comfortable with just having experts decide without any input from groups in the public. The critique is attuned to the more subtle forms and capture. The proceduralism critique then seeks to find an effective balance, with the fear that we have headed too far in an overly procedural direction.^[273] Thus, the critique is more focused on reducing the bite of judicial review and other doctrines. To that end, then, the grant program sits in a place separate and is grafted on differently in a way that likely would not increase procedural barriers.

2. Expanded Judicial Review

Another push against capture and the lack of democratic equality is to expand judicial review for regulations. This view is the inverse of what people call for above, returning to expertise. The thinking is, rather than lessening procedures, we need to give more bite to judicial review by allowing the voices of those who are less involved to bring suit.^[274] Thus, many of these proposals focus on finding ways around the standing issue of the taxpayer dyad.^[275] But while this could serve as a useful push, it may be incomplete.

As discussed above, the lack of taxpayer standing outside the traditional dyad is a ratchet that encourages Treasury Regulations to become ever more solicitous of powerful interests.^[276]

While it is true that broader standing would help, the proposals overlook the numerous barriers to making judicial review effective. For example, one of the key points in litigation regarding the promulgation of regulations is a lack of response to and consideration of significant comments. But, as stated above, an agency need not respond to every comment, only those that are significant.^[277] To do that, though, the public must have the ability to engage with a proposed regulation in the depth of its technicality.^[278] Many groups that would like to contest regulations that favor powerful interests, even if they have the desire to act and even if they had standing, lack the technical expertise to produce significant comments.^[279] Without that, the Treasury need not respond to the comments.^[280] Thus, even if there were standing, it would be a futile exercise.

Additionally, there are numerous important points in the development of regulations. Judicial review, while it casts a shadow over the entire regulatory development, is only something that comes at the end.^[281] And it is a blunt tool. Because it comes at the end, a lot of key decisions about the scope of a rule and some of the methods are often already decided by the time any notion of litigation arises. Furthermore, courts can usually only approve of the rule, overturn the rule, or remand it back to the agency.^[282] It does not allow for some refashioning of the rule to better address various needs or concerns.^[283]

To combat that problem, then, groups outside of industry or the wealthy need to be able to participate both before the issuance of an NPRM and through the notice and comment process effectively. Otherwise, the late in time blunt tool of judicial review does not really help ameliorate the lack of democratic equality in the tax regulatory process.

Finally, there is value in participation outside of the judicial process. Having access to participation and to be taken seriously, even without the threat of judicial review, has key expressive value. Having meaningful participation and being taken seriously, whether or not a lawsuit is imminent, serves key dignitarian values. It pushes towards the notions of acting as an equal in broader society, which is a hallmark of democratic equality.

B. Potential Benefits

The program has the potential benefit of making tax policy substantively more beneficial. But there are other benefits, harder to capture than mere outcomes, that this program can produce. This Section attempts to articulate a few of them.

1. Providing a Broader Viewpoint

The most obvious benefit of this grant program and engagement effort is that a greater set of views should appear before the Treasury and the IRS, with some significant positive results. Garnering these types of viewpoints can lift the grip of traditional and cultural capture. By forcing the Treasury and the IRS to engage with such viewpoints, cogently presented with some level of technical capacity, the agencies must step out of the usual set of those involved in tax policy.

These additional viewpoints can, of course, generate new substantive policy proposals. But just as importantly, adding these viewpoints also adds greater information into the decision-making process. Many of these organizations have networks and connections to communities that often are excluded from the discussion in tax policy and regulatory matters. They can thus bring some information of the lived experiences of these groups in a way that is currently unavailable. For example, a group like a civil rights organization may help provide, through both data and on the ground stories, how the current framework of colorblind taxation harms people of color. Groups supporting working class taxpayers may highlight how certain regulations and policies may harm their livelihoods in ways not captured by distribution analysis. Providing this sort of stream of information, married with technical tax understandings, helps the agencies not only break a sense of cultural capture, but also have the information and evidence necessary to begin to undertake a more proactive framing.

Presenting these viewpoints that are often missing in the discussion also aids in reducing the brittleness. Brittleness is the idea that, often, even with experts and because of blind spots, the system may not be able to adapt to new situations or unintended consequences.^[284] Given the varied backgrounds and networks these organizations will pull from, they will raise issues and bring knowledge of matters that often fall outside of the IRS and the Treasury’s current understanding of tax problems in creating regulations. Uncovering these blind spots can lead to a more effective tax system. These can help alert the Treasury and the IRS as to the potential unintended consequences of an action. And the deliberation can also help force the agencies to think through matters more deeply and consider different options.

Finally, having these public tax actors can also help when the IRS and the Treasury want a more representative rulemaking procedure. Professors Jim Rossi and Kevin M. Stack say that agencies should help address the representation deficit in two ways.^[285] First, they would require agencies to identify stakeholders with whom they want to engage in the rulemaking.^[286] Second, they also say that if there is not enough participation, the agency can run a contest to select some groups to participate.^[287]

The grant program then provides the gaps here to encourage that type of participation. The IRS and the Treasury should allocate funds to engage with these public civil society groups, enabling them to build the capacity necessary to participate in and comment on these rules. Second, the grant recipients serve as a useful pool for Rossi and Stack’s contest for the constant commenter. The IRS and the Treasury can select from some of these grant recipients and potentially give them more grant funding for that time. Those public actors can then coordinate with some other groups that have overlapping interests to comment on regulations and potentially even other guidance.

Thus, this program serves as a complement and a push, if marginal, toward improving the broader set of voices in the room that, in turn, provide better and more legitimate outcomes.

2. Epistemic Democratic Benefits

Democracy-enhancing ideas, like democratic equality and related concepts pushed by tax scholars, also have significant positive epistemic benefits. The two major areas are deliberation and aggregation. This program also helps enhance both benefits.

First, there are deliberative benefits to this process, because more participation generally means a greater variety of voices. Deliberation is often couched as a democratic good in and of itself.^[288] Indeed, the concepts outlined above, like democratic equality, point toward a relational deliberative model of undertaking policy and building a society.^[289] There may even be a self-reinforcing effect of such deliberation in this sphere that can translate to more equal concern for others in different spheres.

But deliberation has an epistemic goal as well. As political scientist Hélène Landemore says, inclusive deliberation yields epistemically better results.^[290] Having deliberation that includes multiple viewpoints allows for “maximiz[ing] [the] cognitive diversity of the group,” which in turn leads to better outcomes.^[291] Inclusive deliberation thus pushes back against the concept of brittleness and cultural capture.^[292] The greater cognitive diversity that inclusive deliberation brings, along with the process of arguing through reasons and treating people with equal respect, brings to the fore different skills, ideas, and perspectives.^[293]

Additionally, deliberation can cause a focus shift. Currently, much of tax policy and even the regulations are dominated by economics.^[294] As noted above, even the discussion of equity often takes an economic air or is subsumed under economic efficiency ideals.^[295] And the presentation of economics creates a sensation of matters being objective.^[296]

Bringing in new voices into the deliberative process of democracy has the additional benefit of underlying that much of what is going on is a values discussion. These other viewpoints can pierce the situation of values parading as objectivity in much of the current tax discussions, especially in the areas of regulations, which present themselves often as merely technical or answered by economic analysis. Such a factor of contesting values and deliberating on them aids not only the tax system, but the broader goals of democratic society.

Second, having greater viewpoints improves the outcomes through the power of aggregation. Aggregation is often referred to as the wisdom of crowds.^[297] Under the Condorcet Jury Theorem, if the average person gets something right, even infinitesimally better than a coin flip, then a large mass of people will get the correct policy outcome.^[298] Under these circumstances, as Landemore shows, larger groups of people involved in a process will then lead toward better outcomes than even a small group of experts alone.^[299] Furthermore, deliberation can aid in this endeavor. Through the careful discussion of matters and input from experts, it increases the likelihood that the average person gets the matter right, and in turn makes aggregation even more powerful.

The grants push us closer to this goal. They increase the likelihood of greater aggregation, because after all, the goal is to get more voices into the room. These can lead toward better outcomes on the overall function of the tax system. It can also help, potentially, avoid some of the problems of brittleness discussed above.

3. Education and Issue Salience

These grants can also raise the issue salience of tax policy matters not only at the regulatory level but more broadly. They can help organizations educate people about the importance of tax policy matters.

On the matter of issue salience, many community organizations or social justice groups seemingly do not think about taxation and tax regulations as particularly important.^[300] Part of that is the marketing of tax as an exceptional matter that is complex and often determined based on “objective” economic theory. But because it is connected to deep issues of economic justice and broader social justice, taxation is important.^[301] Providing easy access to funds and building capacity often can heighten the salience for many of these organizations working in communities and advocating for them, because it allows them to add to their staff. The person who works and develops expertise in taxation could also help interface with others in the organization to create greater holistic goals. The fact that money is out there to defray the costs of bringing on a new person or team helps to create salience.

Additionally, these grants, by reaching out to broader organizations that also connect with other communities, can raise greater awareness of some of the issues in the tax system. Such issues include how seemingly technical matters can eventually lead toward tilting the system in favor of certain interests. Education in both the organizations and the broader public they serve also helps to increase the ability of people to participate in the process. That in turn can create a positive feedback loop of enhancing countervailing forces against the current forces pushing tax regulations.

In some ways too, establishing the grants and networks of recipient organizations and academic institutions can also increase the issue salience of issues that are hidden. While likely not enough to make obscure provisions front page news, such feedback can help encourage others to get interested in certain tax provisions and perhaps how regulations are used to erode away the tax base for powerful interests.

4. Developing New Experts

Finally, in creating capacity in these organizations for participation in tax regulations and other guidance, it also creates a network of people who have both tax expertise and are in contact more frequently with interests that are not well-represented in tax policy development. Such people will likely approach tax policy from a more critical view than many of those who come up through the standard ranks of the back and forth between private practice and government.

The benefits of this new expert path not only mean that there will be people who have the capability to challenge some of the existing frameworks in tax regulations and policy generally, but it also provides a new source of people who could enter government service. Whether it is people in the Treasury and the IRS who are drawn from this new pool, or staffers in Congress, these experts will then bring a different set of experiences, knowledge, networks, and understandings than the narrow group that currently tends to exist. That, too, creates a boon for the government and further pushes back against cultural capture.

C. Concerns

1. Antiegalitarian Outcomes

One major critique is that this proposal may not push toward the substantive goal of democratic equality. Some worry that increasing public participation would increase inequality and thus undermine democratic equality.^[302]

But this concern may not be so large. First, the conception of democracy embodied in democratic equality tolerates inequalities. The requirements of democratic equality are stringent but not overly exacting. Under that concept, people need only to have the provision of the capabilities to participate as equals in all aspects of civil society, ranging not only from politics and the economy, but also as other communal activities.^[303] Additionally, people must also not be in a position of subjugation to others who may have more in their interactions in civil society.^[304] People must not have a badge of dishonor, too, for being of lower wealth or income.^[305] So long as those are in place, inequalities are fine.

Theoretically, then, a society can meet the criteria of democratic equality even if there is a great deal of wealth and income inequality.^[306] So long as people have access to the basic capabilities to participate in all aspects of civil society, then there is no additional need for massive redistribution. Of course, to reach that end, it means at the very least that basic needs are met. It also means ensuring that people have access and the tools to participate in matters like work, broadly defined, the communities, and politics. Furthermore, it requires that wealth does not provide greater access to political power. And the lack of such wealth should not lead to a badge of dishonor.^[307]

But, of course, that is not the case in American society as it stands. Wealth creates honor; poverty leads to dishonor. Many people do not even have access to basic needs, let alone broader capabilities to participate as equals in all parts of civil society.^[308] Furthermore, as discussed by Professor Repetti and others, those with wealth have greater access to political power.^[309] Thus, given how the state of society is, democratic equality would probably require significant redistribution of wealth and income.

Because, on a practical level, reaching democratic equality’s substantive goals would require redistribution, antiegalitarian substantive outcomes are problematic. But even so, there is a second reason why this concern is not as large. It is generally unlikely that the public would support upward redistribution. Americans, by and large, do support higher taxes on wealthy people and companies as well as some redistribution.^[310] The idea of raising taxes on high-net-worth people and on MNEs tends to poll relatively well.^[311] Indeed, there is a sense that many of these people and entities who are well-off take advantage of the system to the expense of working- and middle-class Americans.^[312] But the idea of closing loopholes and raising taxes, especially for those at the top, generally does well.

Furthermore, many Americans support helping the poor by ending homelessness or providing food support.^[313] What Americans dislike is a larger government.^[314] These two results show that it is not unlikely, especially given the environment of deliberation, education, and salience raising the grant program creates, that there may be, on balance, more egalitarian outcomes than what we have now.

There is also educational and deliberative value in having people work with these organizations and the government, as dialogue may push toward more redistribution. The discussion among various organizations with the communities and constituencies they serve helps to humanize groups that are often seen as different. The mechanism and epistemic good of deliberation then also can more likely help to sway people toward greater redistribution.

Finally, even if the results may not be as redistributionary as this Author would support, they come from a stronger base of democratic support. A great deal of the policies that turn against redistribution and egalitarian principles in the system stem from the lack of voice and domination. But with the grant program in place and a greater variety of voices, the perhaps anti-redistribution result is more likely to be the result of actual democratic engagement. As a result, these outcomes are likely more legitimate than the current state.

2. Workability

A final concern is that the program is too difficult to administer and may not have a large effect. These related concerns focus on workability. The core of the argument is that, unlike other grant programs, this program is broader ranging.^[315] The tax system touches far more than energy rate setting or CLERCA sites. Additionally, having these voices in the process may not make meaningful change.

On the grounds that it is too dispersed to administer, the best response is that at least part of the IRS, the National Taxpayer Advocate, already has some experience in administering grants and engaging with recipients.^[316] The IRS and the Treasury could draw on this knowledge and ensure that those administering the program work on the outreach with recipients and potential grant recipients.

As for the concern that the effect may be limited, the question is really one of baseline setting. Currently, very few of these voices that push back against powerful and wealthy interests exist in the system.^[317] While this program may not end that power and influence, it can and should make some changes here. At the very least, it makes some small but important progress toward the goals of democratic equality.

Furthermore, the program does not envision itself as the solution to reach the substantive or even procedural goals of democratic equality. Rather, it is one correction to a sort of market failure of views that are not presented. By implementing a little on the side of those who tend not to participate, it makes a small but important change that could accumulate with other interventions to improve democratic equality.

To that end, other matters could be undertaken to improve democratic equality. Perhaps the courts and Congress should consider changes to the standing doctrine on taxpayer suits. Having regulatory contrarians to speak on substantive tax regulations could also help. Many of the changes to the legislative process, outlined by scholars above, should also happen. No one solution will lead toward this end, but these interventions can work together and build off each other.

VII. Conclusion

Addressing the democracy problem of taxation is complex and difficult. This Article contributes to this discussion by focusing on an area that is often left out of the discussion, the promulgation of regulations, and by proposing a grant program to get greater voices heard in the process. While not a complete solution to the problems of democracy within American taxation, it provides an important foothold for new voices to get heard and elevates what is often a more hidden process of regulations. It also has a positive side effect of creating more engagement in taxation with people outside of the traditional areas of government, MNEs, wealthy people, and those who serve them. It thus expands the field of those engaged in taxation and seeks to tie people closer to the tax system.

This proposal ideally can, and should, work within other reforms proposed in the tax and democracy sphere, ranging from improvements in the legislative process and greater access to judicial review of tax regulations. The goal should be to ensure that a broader array of voices is heard in all branches of the federal government. Additionally, these types of mechanisms can also apply to state and local tax systems within the United States. And the ideas here could also serve as a model for other countries. While the processes for tax policy making are different abroad,^[318] engaging civil society groups and other NGOs in this discussion and providing capacity can also help improve some matters in tax systems abroad.

Furthermore, even within the U.S. federal tax system’s regulatory area, there are other interventions that could arise. Future work will examine other means toward ensuring counterbalances in the tax regulatory process, including the potential for using existing or creating new regulatory contrarians and finding other ways to have public involvement. It will also look at how to harness the contacts that other agencies in the government may have with broader publics to aid in tax programs that require cross-agency coordination between the Treasury and the IRS and other parts of the federal government.

Ensuring that our tax system is democratic is not merely something that is nice to have. It is vital for our free society. Given the importance of taxation to people’s lives and the overall structure of the state, it is something that we cannot ignore.

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1. Margo Crandall-Hollick & Joseph Reosenberg, Unpacking the TCJA: Who Benefits and Who Loses from Extending Major Provisions, Tax Pol’y Ctr.: TaxVox (Dec. 19, 2024), https://taxpolicycenter.org/taxvox/unpacking-tcja-who-benefits-and-who-loses-extending-major-provisions [https://perma.cc/VN2K-U78P].

2. How Does the Corporate Income Tax Work?, Tax Pol’y Ctr.: Briefing Book (Jan. 2024), https://taxpolicycenter.org/briefing-book/how-does-corporate-income-tax-work [https://perma.cc/45G8-LZPH].

3. David Kamin et al., The Games They Will Play: Tax Games, Roadblocks, and Glitches Under the 2017 Tax Legislation, 103 Minn. L. Rev. 1439, 1445, 1488 (2019) (noting how the TCJA is tilted in favor of wealthy interests and how it created new opportunities for well-off people and entities to game the system and reduce their tax liabilities).

4. See generally id. (noting how the TCJA is tilted in favor of wealthy interests and how it created new opportunities for well-off people and entities to game the system and reduce their tax liabilities).

5. Jesse Druker & Eric Lipton, How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich, N.Y. Times (Sep. 27, 2020), https://www.nytimes.com/2019/08/31/business/tax-opportunity-zones.html?register=email&auth=register-email [https://perma.cc/DU4X-9JUM].

6. Id.

7. Brian Galle & Stephen Shay, Admin Law and the Crisis of Tax Administration, 101 N.C. L. Rev. 1645, 1684–87 (2023).

8. Id. at 1665, 1701.

9. See Shu-Yi Oei & Leigh Osofsky, Legislation and Comment: The Making of the Sec. 199A Regulations, 69 Emory L.J. 209, 234 (2019). In their survey, only one comment came from the public interest and only two from individuals out of fifty-one comments in a rulemaking for I.R.C. § 199A regulations prior to the promulgation of proposed regulations. There were also relatively small numbers outside of the large trade groups, community bankers, and advisors in the actual comment period. Id. at 234, 242.

10. Craig Holman & Caralyn Esser, Slowing the Federal Revolving Door 1 (2019), https://www.citizen.org/article/slowing-the-federal-revolving-door/ [https://perma.cc/4CRU-7935].

11. Oei & Osofsky, supra note 9, at 218, 235–36.

12. See generally Dorothy A. Brown, The Whiteness of Wealth How the Tax System Impoverishes Black Americans–and How We Can Fix It (2021) (discussing how the development of the tax laws ignored black voices and their situation).

13. Taxes, Gallup, https://news.gallup.com/poll/1714/Taxes.aspx [https://perma.cc/W4PZ-J38T] (last visited Sep. 11, 2025).

14. Lawrence Zelenak, Learning To Love Form 1040: Two Cheers for the Return-Based Mass Income Tax 3–4 (2013) (discussing fiscal citizenship).

15. See Milan N. Ball, Cong. Rsch. Serv., R46551, The Federal Taxing Power: A Primer 18, 23 (2024), https://www.congress.gov/crs-product/R46551 [https://perma.cc/BW4D-YKD6].

16. The State of Public Trust in Government 2024, P’ship for Pub. Serv., https://ourpublicservice.org/publications/state-of-trust-in-government-2024/ [https://perma.cc/JF55-TZEB] (last visited Sep. 23, 2025).

17. See Zelenak, supra note 14, at 52–53 (discussing an interplay between social capital and governmental trust and how the tax system plays a role here).

18. The proposal here is not exclusive of other changes that are vital. A nonexhaustive list of those working on these changes are: Rebecca Kysar who discusses changes and issues in the Congressional process, Rebecca M. Kysar, Dynamic Legislation, 167 U. Penn. L. Rev. 809, 868 (2019) (discussing how to use dynamic legislation to improve democracy in tax and fiscal legislation), Rebecca M. Kysar, Tax Law and the Eroding Budget Process the Past, Present, and Future of the Federal Tax Legislative Process, 81 L. & Contemp. Probs., no. 2, 2018, at 61, 71, 94–96 (discussing the budget rules and means to make them more democratically responsive but still respecting future interests who may have to pay deficits); Clinton G. Wallace, who writes about legislation and certain administrative procedures, Clinton G. Wallace, Democracy Avoidance in Tax Lawmaking, 25 Fla. Tax Rev. 272, 336–38 (2021) (discussing democracy avoidance and ways to improve democratic process in tax legislation), Clinton G. Wallace & Jeffrey M. Blaylock, Administering Taxes Democratically?, 94 Temp. L. Rev. 49, 81 (2021) (noting that the reduction in the use of temporary Treasury Regulations may have decreased democracy in the regulatory process), Clinton G. Wallace, Tax Policy and Our Democracy, 118 Mich. L. Rev. 1233, 1249–56 (2020) (outlining some ideas of democracy in tax); and Ari Glogower and Joshua Blank who talk about greater procedural protections in the examination and controversy procedures, Joshua D. Blank & Ari Glogower, Progressive Tax Procedure, 96 N.Y.U. L. Rev. 668, 707, 713, 728, 736 (2021) (discussing means testing certain tax procedure matters and penalties to allow for greater penalties at higher-income levels and lower penalties for lower-income earners, thereby leveling the field).

19. Among them are works by K. Sabeel Rahman, K. Sabeel Rahman, Democracy Against Domination 2–3 (2017), and Elizabeth Anderson, who developed the concept of democratic equality, Elizabeth S. Anderson, What Is the Point of Equality?, 109 Ethics 287, 289, 313 (1999).

20. Will Kenton, Understanding Regulatory Capture: Definition, Impact, and Examples, Investopedia (Nov. 10, 2025), https://www.investopedia.com/terms/r/regulatory-capture.asp [https://perma.cc/85D2-G6MJ].

21. See supra note 18. One exception is Wallace & Blaylock, supra note 18, which examines some of the administrative procedure matters. But it is an outlier as most pieces tend to focus on legislation, audit procedures, judicial procedures, or the need to have administrative law doctrines apply in taxation.

22. See supra note 18.

23. Anderson, supra note 19, at 289–90, 313–14.

24. Id. at 289–90, 314.

25. Id. at 289. Anderson spends much of her piece offering a detailed critique of both the narrowness of traditional luck egalitarian theory and the problematic conclusions it creates. Id.

26. Id. at 290.

27. Id. at 291–92.

28. Id.

29. Id. at 301. Anderson outlines a litany of various problems with abandoning those with bad option luck. Id. at 295–302.

30. Id. at 306.

31. Id. at 306–07.

32. Id. at 307.

33. Id. at 289.

34. Id. at 312.

35. Id. at 313.

36. Id.

37. Id.

38. Id. at 313–14.

39. Id. at 321.

40. Liam Murphy & Thomas Nagel, The Myth of Ownership: Taxes and Justice 31–37 (2002); see Anderson, supra note 19, at 321–22; see also Rahman, supra note 19, at 65, 67–68 (noting that early twentieth century Progressives rejected the idea of a “natural” market economy, but rather saw the market as the result of society, state, politics, and power); James Repetti, The Appropriate Roles for Equity and Efficiency in a Progressive Individual Income Tax, 23 Fla. Tax Rev. 522, 595–96 (2020) (arguing that the concept of market efficiency is indeterminate and problematic); Jeremy Bearer-Friend et al., Taxation and Law and Political Economy, 83 Ohio St. L.J. 471, 501–03 (2022) (discussing strain in tax of the private market as a public creation connection point under a pluralist LPE theory); Linda Sugin, Invisible Taxpayers, 69 Tax L. Rev. 617, 656–59 (2016) (defining economic fairness in a way that notes that any economic arrangement is embedded in society and other value systems; it does not exist independently of society and government).

41. Murphy & Nagel, supra note 40, at 31–37; Anderson, supra note 19, at 321–22.

42. See Anderson, supra note 19, at 326 (noting that democratic equality rejects matters of wealth granting greater social status or political influence, but if these are not overly commodified, then they are acceptable); see also Rahman, supra note 19, at 2–4 (discussing how wealth leads to power that in turns leads toward domination, and how overall processes must reject that view); Murphy & Nagel, supra note 40, at 31–37 (explaining that private property and income only exist as a result of a tax-supported government, and that therefore taxes are merely an equitable distribution of income).

43. Anderson, supra note 19, at 326; Rahman, supra note 19, at 2–4; Murphy & Nagel, supra note 40, at 31–37.

44. Anderson, supra note 19, at 313.

45. See id. at 326 (noting that democratic equality would not require anything to the extreme of the Rawls’s difference principle if people do not agree to it, so long as certain basic capabilities are provided).

46. Id. at 316–18 (drawing on Amartya Sen’s capabilities approach and requiring capabilities to avoid entanglements in oppressive relationships and the capabilities of participating as full and equal citizens in all aspects of democratic society, including, but not limited to, the political and policymaking processes).

47. Id. at 317.

48. Id. at 317–18.

49. Id. at 326.

50. Id.

51. Id. at 320.

52. Id. at 326.

53. See Oei & Osofsky, supra note 9, at 242.

54. See Joshua L. Kalla & David E. Broockman, Campaign Contributions Facilitate Access to Congressional Officials: A Randomized Field Experiment, 60 Am. J. Pol. Sci. 545, 552–53 (2016) (noting that members of Congress are more likely to meet with someone who is identified as a donor).

55. Repetti, supra note 40, at 595–96 (arguing against the current tilt toward giving efficiency a primary place in tax policy setting).

56. See id. at 549, 552–54 (discussing how greater wealth leads to an entrenchment of interests in taxation); Kalla & Broockman, supra note 54, at 552–53 (discussing that members of Congress are responsive to those who are donors to the campaign).

57. A great deal of work on the legislative process has been done by Rebecca Kysar, who shows how the use of unusual budget processes, like reconciliation, have undermined transparency and democratic order. Kysar, supra note 18, at 93–94, 96. Clint Wallace has also shown some of these problems that undermine the procedural values of democratic equality in the legislative process. Wallace, supra note 18, at 276–77.

58. See James R. Repetti, Democracy and Opportunity: A New Paradigm in Tax Equity, 61 Vand. L. Rev. 1129, 1138, 1144–45, 1154–55, 1158 (2008) (noting how there are a great deal of issues that large wealth gaps create that undermine people’s ability to participate as full members of all aspects of civil society and the status the wealthy have).

59. Paul Kiel & Hannah Fresques, Where in the U.S. Are You Most Likely To Be Audited by the IRS?, ProPublica, (Apr. 1, 2019), https://projects.propublica.org/graphics/eitc-audit [https://perma.cc/MP7H-3RXJ]; IRS Audits Poorest Families at Five Times the Rate for Everyone Else, TRAC IRS (Mar. 8, 2022), https://tracreports.org/tracirs/latest/679/ [https://perma.cc/7GJC-C6HV].

60. See Hadi Elzayn et al., Measuring and Mitigating Racial Disparities in Tax Audits, 140 Q.J. Econ. 113, 129–30, 134, 136–37 (2025) (discussing how the audit rates for Black taxpayers is higher than for non-Black taxpayers and it is driven almost entirely by Earned Income Tax Credit audits); see also Blank & Glogower, supra note 18, at 699–700, 704 (noting that we want procedure to tilt in favor of those with less means rather than those with greater means as the current activity-based method does).

61. Keith Fogg, Access to Judicial Review in Non-Deficiency Tax Cases, 73 Tax Law. 435, 447–48 (2020).

62. How to Navigate the U.S. Tax Code with Precision, Thomas Reuters: Tax & Acct. (Mar. 3, 2025), https://tax.thomsonreuters.com/blog/how-to-navigate-the-u-s-tax-code-with-precision/ [https://perma.cc/K25W-6KJX].

63. Joseph Bishop-Henchman, How Many Words Are in the Tax Code?, Tax Found. (Apr. 15, 2014), https://taxfoundation.org/blog/how-many-words-are-tax-code/ [https://perma.cc/X6RM-XCP9] (noting that in 2012, the tax statutes and regulations were estimated to total roughly 9,000 pages).

64. For example, I.R.C. § 482, which deals with the allocation of income between entities that are controlled, also known as transfer pricing, is but a paragraph, but the regulations run at least nine sections, with some older sections still in force and numerous proposed regulations. Treas. Reg. §§ 1.482-0–9 (2022). Also, most of the matters of consolidated returns, under I.R.C. § 1502, are entirely spelled out in about nineteen sections of regulations. Treas. Reg. §§ 1.1502-0–19 (2024).

65. See Rahman, supra note 19, at 23–24 (discussing in general that there are important values discussions in the regulatory development process).

66. See, e.g., I.R.C. § 1502 (delegating authority to the Secretary to promulgate consolidated returns); Treas. Reg. §§ 1.1502-0–19 (long set of regulations issued under the Code provision); I.R.C. § 482 (transfer pricing, a single paragraph); Treas. Reg. §§ 1.482-0–9 (long set of transfer pricing regulations that describe the different methods). Other examples are discussed infra Part IV.

67. See Rahman, supra note 19, at 23–24; see also Oei & Osofsky, supra note 9, at 256–58 (discussing how often issues are not resolved in the legislative process and how that leads toward spillover effects); Wallace & Blaylock, supra note 18, at 75–76 (noting that large portions of the TCJA lost more revenue because of taxpayer favorable regulations and calling out specifically I.R.C. § 119A and the OZs program as part of it).

68. Susan C. Morse, Safe Harbors, Sure Shipwrecks, 49 U.C. Davis L. Rev. 1385, 1390–92, 1419 (2016).

69. Id. at 1429.

70. See id. 1397 (arguing that safe harbors and sure shipwrecks have effects of behavior but do so asymmetrically).

71. See id. at 1391–93.

72. See infra Section IV.C.

73. Morse, supra note 68, at 1396–97.

74. See sources cited supra note 66.

75. Kristin E. Hickman, Coloring Outside the Lines: Examining Treasury’s (Lack of) Compliance with Administrative Procedure Act Rulemaking Requirements, 82 Notre Dame L. Rev. 1727, 1797–99 (2007).

76. Compare id. (discussing how the IRS and the Treasury became insular from administrative law trends in the 1970s and 1980s), with Rahman, supra note 19, at 40–43 (noting the neoliberal turn in administrative state posited on social choice theory and other developments that led toward market primacy over managerial expertise).

77. Hickman, supra note 75, at 1760–61. Hickman notes that the Treasury frequently declared Treasury Regulations as interpretative, which falls outside of the formal notice and comment process, or the Treasury would issue Temporary Regulations with the force of law under the good cause exception to notice and comment and never promulgate a permanent rule under the APA. Id. at 1786. About 40.9% of the regulatory projects of the Treasury prior to 2007 failed to meet the APA’s informal rulemaking notice and comment procedures. Id. at 1795.

78. See Kristin E. Hickman, The Need for Mead: Rejecting Tax Exceptionalism in Judicial Deference, 90 Minn. L. Rev. 1537, 1619 (2006) (arguing against tax exceptionalism and a more unified approach between tax and administrative law). Hickman’s work has spawned a useful discussion too in the tax scholarly community. See, e.g., Lawrence Zelenak, Maybe Just a Little Bit Special After All?, 63 Duke L.J. 1897, 1901–04 (2014) (arguing that there is some exceptionalism to tax, mainly deriving from how others see tax and that in certain cases is justified); Alice G. Abreu & Richard K. Greenstein, Tax: Different, Not Exceptional, 71 Admin. L. Rev. 663, 701, 706, 716–17 (2019) (stating that, while there are differences between tax law and other areas of law, characterizing the sum total as exceptional is not pragmatically useful).

79. Mayo Found. for Med. Educ. & Rsch. v. United States, 562 U.S. 44, 55–58 (2011) (applying Chevron deference to a Treasury Regulation).

80. Hickman, supra note 75, at 1805–06.

81. See Rahman, supra note 19, at 141.

82. See id. at 22–25 (describing the regulatory process and criticizing the notice and comment process as not living up to democratic ideals).

83. See id. at 156–57 (discussing capture). Perhaps the most classic work talking about interest group capture here is from Mançur Olsen, where he determines that “unless the number of individuals in a group is quite small, or unless there is coercion or some other special device to make individuals act in their common interests, rational, self-interested individuals will not act to achieve their common or group interests.” Mançur Olson, The Logic of Collective Action: Public Goods and the Theory of Groups 2 (2002). Essentially, then, large public interests are often put to the wayside because the costs of organizing are larger than the benefit they receive. Id. at 34–35. This result differs from smaller groups with a concentrated interest. Id. at 34.

84. Oei & Osofsky, supra note 9, at 213–14 (finding that most of the discussions came from industry, trade groups, and sophisticated tax practitioners).

85. See id. at 226 (observing that the final rules did not depart from the proposed rules’ approach).

86. Id. at 247–48.

87. See id. at 224–26.

88. See id. at 245, 253–55.

89. Wallace & Blaylock, supra note 18, at 74–75, 82–83.

90. See id. at 91–93.

91. Wendy E. Wagner, Administrative Law, Filter Failure, and Information Capture, 59 Duke L.J. 1321, 1325 (2010).

92. Id.

93. Id. at 1326.

94. Id. at 1328–29.

95. Id. at 1378–79.

96. See id.; see also Oei & Osofsky, supra note 9, at 234, 242, 259 (finding that prior to the NPRM few nonindustry or industry advisors commented and few of them also commented after issuing the NPRM).

97. James Kwak, Cultural Capture and the Financial Crisis, in Preventing Regulatory Capture 71, 79–80 (Daniel Carpenter & David A. Moss eds., 2014).

98. Id. at 78–79, 83. Kwak defines cultural capture as capture that works not through material incentives or rational debate. Rather, it tends to operate through culture, “a set of shared but not explicitly stated understandings about the world.” Id. at 78–79. The mechanisms of action here are through group identification, status, and relationship networks. Id. at 79.

99. Most of the work in political science in this area tends to focus on Congress, but the key studies are on staff, who tend to be a bit of a mix between agency officials and pure political actors. Studies have shown staff and other elites have this tilt in their views for various reasons. Alexander Hertel-Fernandez, Matto Mildebberger & Leah C. Stokes, Legislative Staff and Representation in Congress, 113 Am. Pol. Sci. Rev. 1, 2–3, 9 (2019); Geoffrey Henderson et al., Conducting the Heavenly Chorus: Constituent Contact and Provoked Petitioning in Congress, Persp. on Pol., March 2023, at 191, 202; David E. Broockman & Christopher Skovron, Bias in Perceptions of Public Opinion among Political Elites, 112 Am. Pol. Sci. Rev. 542, 544–46 (2018); Kalla & Broockman, supra note 54, at 545–46.

100. See Kwak, supra note 97, at 80–81, 89 (noting how in-group identity can be fostered by the fact that people working in an agency and people representing powerful regulated interests may have gone to the same educational institutions and send their children to the same schools).

101. See id. at 84, 91 (discussing similar concerns in financial regulation).

102. Id. at 83.

103. See id. at 87–88 (discussing how wealthy hedge fund managers are seen as high status and the lionization of those with wealth or in charge of financial institutions as engines of economic growth).

104. Id. at 86–87.

105. Id. at 89–90.

106. Id. at 89–92.

107. See, e.g., Oei & Osofsky, supra note 9, at 260–62 (noting the higher access and repeat play by powerful interests in the development of the § 199A regulations).

108. See Kwak, supra note 97, at 90–91 (describing the notions of regulatory communities); Sloan G. Speck, Tax Planning and Policy Drift, 69 Tax L. Rev. 549, 561–63 (2016) (defining a policy community and identifying the world of tax policy as one of those policy communities).

109. Kwak, supra note 97, at 90–91.

110. Speck, supra note 108, at 559–63.

111. See id. at 554–55, 560 (defining planning drift).

112. See Model Rules of Professional Conduct: Preamble & Scope, ABA, https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/model_rules_of_professional_conduct_preamble_scope/ [https://perma.cc/2EVX-FYCR] (last visited Nov. 25, 2025).

113. See Galle & Shay, supra note 7, at 1685–86 (noting that a bar association gave a technical comment, but did not engage with the matter that may have undermined the overall statutory scheme).

114. See id. at 1684–87 (discussing the Global Intangible Low-Taxed Income high-tax exemption and how only one out of thirty-five comments came from a party that was not tied to MNEs).

115. See Kwak, supra note 97, at 79, 93, 95.

116. Id. at 96–98 (noting ways to debias, including having access to information and counterarguments that challenge the viewpoints and having a more diverse background for regulators).

117. Galle & Shay, supra note 7, at 1657–58, 1674–75.

118. Gary Lawson, Federal Administrative Law 462–63 (9th ed. 2022) (describing the development of procedural innovations required to have meaningful judicial review that is not in the APA); id. at 787–89 (describing hard look review and thin rationality and the interplay); id. at 860–61 (arguing when choosing between substantive defects and procedural ones, courts generally go with procedural defects).

119. See id. at 1100–01 (outlining the two standings and introducing constitutional standing); id. at 1123–25 (describing the zone of interest test).

120. Galle & Shay, supra note 7, at 1677.

121. Sugin, supra note 40, at 631–32.

122. Id. at 633.

123. Id. at 635–40 (outlining a series of harms that invisible taxpayers face from overly generous action by the government to taxpayers, from undermining antidiscrimination laws to economic harms from reduced revenue collection).

124. See Oei & Osofsky, supra note 9, at 221, 258.

125. Id. at 221–22, 224–25, 234.

126. See Wagner, supra note 91, at 1378–79, 1384–88 (noting that many public oriented actors, unlike regulated industry parties, often do not have access to information resources or financial resources; and because of a need to stave off litigation by regulated parties, agencies often propose rules with long and detailed preambles that are difficult for groups to address or claim credit, because they are often mired in details); Jonathan Skinner-Thompson, Procedural Environmental Justice, 97 Wash. L. Rev. 399, 412–14 (2022) (describing the requirement under administrative law to raise issues with “reasonable specificity” during the notice and comment process before there is access to judicial review).

127. See Skinner-Thompson, supra note 126, at 412–14, 412 n.79.

128. Id. at 439–40.

129. See Mission and History, Nat’l Urb. League, https://nul.org/mission-and-history [https://perma.cc/8WFU-4DJC] (last visited Sep. 9, 2025); We’re on a Mission, NAACP, https://naacp.org/about/mission-vision [https://perma.cc/G9YA-NGCP] (last visited Sep. 9, 2025).

130. See Resolution: In Support of Fairness in Taxation to Reduce the Racial Wealth Gap Through Federal Tax Policy: Restoring the State and Local Dedication, NAACP (2022), https://naacp.org/resources/support-fairness-taxation-reduce-racial-wealth-gap-through-federal-tax-policy-restoring [https://perma.cc/EU3L-SL3G].

131. For example, The Ohio State University has its Extension program as one means to perform this outreach. OSU Extension, The Ohio St. Univ., https://extension.osu.edu/about/vision-mission-values [https://perma.cc/S6BJ-93X3] (last visited Sep. 9, 2025).

132. About the Tax Law Center, Tax L. Ctr.: NYU L., https://taxlawcenter.org/about [https://perma.cc/AM8V-6TP3] (last visited Sep. 8, 2025); The New Tax Law Center at NYU Law Aims To Protect and Strengthen the Tax System, NYU L. (Jan. 26, 2021), https://www.law.nyu.edu/news/tax-law-center-lily-batchelder-david-kamin-chye-ching-huang [https://perma.cc/2L3Z-Q7QT].

133. See Jack Salmon, How Government Funding Compromises Nonprofit Independence, Philanthropy Roundtable (Aug. 20, 2025), https://www.philanthropyroundtable.org/resource/how-government-funding-compromises-nonprofit-independence/ [https://perma.cc/2HFU-KTVP].

134. National Association for the Advancement of Colored People (NAACP), Influence Watch, https://www.influencewatch.org/non-profit/naacp/ [https://perma.cc/K98L-K8MV] (last visited Oct. 24, 2025); National Urban League, Influence Watch, https://www.influencewatch.org/non-profit/national-urban-league/ [https://perma.cc/H8F5-MVE7] (last visited Oct. 24, 2025).

135. See Nat’l Ass’n of Regul. Util. Comm’rs, State Approaches to Intervenor Compensation 5, 11, 13 (2021), https://pubs.naruc.org/pub/B0D6B1D8-1866-DAAC-99FB-0923FA35ED1E [https://perma.cc/3K9G-2QE9]. The report shows that the purpose of many intervenor compensation programs is to provide the different perspectives of public interest groups and smaller consumers. These supplement state funded public advocates, who while useful, often miss some of the unique perspective of these public interest groups or smaller consumers. Id. at 12, 21.

136. Cal. Pub. Util. Code §§ 1801–1812 (West 2025); Nat’l Ass’n of Regul. Util. Comm’rs, supra note 135, at 14.

137. Intervenor Compensation Program, Cal.: Pub. Utils. Comm’n, https://www.cpuc.ca.gov/proceedings-and-rulemaking/intervenor-compensation [https://perma.cc/DU2T-QYJ9] (last visited Oct. 24, 2025).

138. For example, while California has significant payouts, some states have a program on the books, but it is rarely used. Nat’l Ass’n of Regul. Util. Comm’rs, supra note 135, at 5–6, 11, 14. Furthermore, even though there are successes in the California program, payments are often not timely, new entrants have difficulty getting into the system, and administrative matters can be onerous for smaller less experienced groups. Id. at 22–24.

139. See Leah Cardamore Stokes, Short Circuiting Policy: Interest Groups and the Battle Over Clean Energy and Climate Policy in the American States 242 (2020).

140. See id. (noting that the intervenor payment program has essentially helped to create the Utility Reform Network in California, which has made significant contributions on reducing rates and pushing for environmental issues).

141. For example, Professor Stokes notes that using intervenor compensation can help to reform institutions and debates toward environmental issues in the electric utility context. See id. at 242, 248–49.

142. See Skinner-Thompson, supra note 126, at 439.

143. Id.

144. See id.

145. Id.

146. Id. at 439–40.

147. See id. at 444–46 (showing that TAGs have similar burdens in application and administration as the California Intervenor Payment Program); Nat’l Ass’n of Regul. Util. Comm’rs, supra note 135, at 22 (explaining the application and administrative problems with the California Intervenor Payment Program).

148. See Skinner-Thompson, supra note 126, at 441–42 (providing a case study of the Lower Duwamish River Superfund site and showing how the TAGs allowed for greater environmental justice and equitable results).

149. Id. at 446.

150. Wagner, supra note 91, at 1427.

151. See Federal Tax Obligations of Nonprofit Corporations, Internal Revenue Serv. (Aug. 20, 2025), https://www.irs.gov/charities-non-profits/federal-tax-obligations-of-nonprofit-corporations [https://perma.cc/FWA2-6MKP].

152. Blaine G. Saito, Context, Purpose, and Coordination in Taxation, 55 Conn. L. Rev. 375, 384 (2023).

153. Id. at 381–82.

154. Anderson, supra note 19, at 326.

155. See Oei & Osofsky, supra note 9, at 234, 263 (observing pre-notice comments and even post notice comments came from industry groups, trade associations, and their advisors).

156. National Urban League Inc, ProPublica (Dec. 22, 2025), https://projects.propublica.org/nonprofits/organizations/131840489 [https://perma.cc/4NNG-YYAQ]; Financial Disclosures, NAACP, https://naacp.org/resources/financial-disclosures [https://perma.cc/5TUX-9UH6] (last visited Sep. 26, 2025).

157. See, e.g., Mission and History, supra note 129 (showing a historic civil rights organization focused on economic, social, and community advocacy); We’re on a Mission, supra note 129 (exhibiting an organization dedicated to political, economic, social, and educational advocacy).

158. See I.R.C. § 509(a)(2) (requiring a third of revenues for a public charity to come from donors who donate less than 1% of the revenue, i.e., public support).

159. See id. § 501(c)(3) (prohibiting partisan or campaign political processes); id. § 501(h)(1) (denying exemption to public charities with a substantial amount of lobbying or grass roots expenditures); id. § 4911(d)(1)(B) (discussing these expenditures as mainly influencing legislative branch officials and not administrative agencies); Treas. Reg. § 1.501(c)(3)-1(c)(3) (defining action organizations as nonexempt, but with a focus on legislation or ballot initiatives).

160. See Treas. Reg. § 1.501(c)(3)-1(c)(3) (discussing what exactly is prohibited political activity, which does not include administrative comments).

161. See id. (noting that Congress defines these prohibited political activities and could likely do the opposite); Frequently Asked Questions About the Ban on Political Campaign Intervention by 501(c)(3) Organizations: Overview, Internal Revenue Serv. (Jan. 30, 2025), https://www.irs.gov/charities-non-profits/charitable-organizations/frequently-asked-questions-about-the-ban-on-political-campaign-intervention-by-501c3-organizations-overview [https://perma.cc/CY7N-EWC2] (noting that Congress defines these prohibited political activities and could likely do the opposite).

162. See, e.g., Frequently Asked Questions, Sierra Club Found., https://www.sierraclubfoundation.org/faq [https://perma.cc/C3PQ-NWG6] (last visited Sep. 14, 2025) (stating that one branch is a 501(c)(3) and the other is a 501(c)(4)).

163. See Unused Federal Grant Dollars (Infographic), U.S. Gov’t Accountability Off. (Apr. 20, 2016), https://www.gao.gov/blog/2016/04/20/unused-federal-grant-dollars-infographic [https://perma.cc/QPP2-JVBV] (stating that millions of federal grant dollars go unspent).

164. See Understanding the Average Hours for Grant Writing: A Comprehensive Guide, AlliedGrantWriters (Dec. 23, 2024), https://www.alliedgrantwriters.com/average-hours-for-grant-writing/ [https://perma.cc/XC8V-SQP8] (claiming it can take thirty to fifty hours to write a typical grant, and even more for complex grants).

165. See Form 990 Series Which Forms Do Exempt Organizations File Filing Phase in, Internal Revenue Serv. (Aug. 20, 2025), https://www.irs.gov/charities-non-profits/form-990-series-which-forms-do-exempt-organizations-file-filing-phase-in [https://perma.cc/F24U-K7GY] (discussing a tiered structure with more complicated forms for larger organizations).

166. See Instructions for Form 990-EZ (2024), Internal Revenue Serv. (Jan. 16, 2025), https://www.irs.gov/instructions/i990ez [https://perma.cc/LVX9-HED8] (showing the difference between the estimated average time to complete the different types of 990 forms).

167. See Applying for a Technical Assistance Grant (TAG), U.S. Env’t Prot. Agency (Aug. 12, 2025), https://www.epa.gov/superfund/applying-technical-assistance-grant-tag [https://perma.cc/GL8S-3C9M] (explaining the steps to applying for a TAG grant); About Form 990, Return of Organization Exempt from Income Tax, Internal Revenue Serv. (Jan. 30, 2025), https://www.irs.gov/forms-pubs/about-form-990 [https://perma.cc/7LB6-9MUW].

168. See Financial Transparency and Public Disclosure Requirements, Nat’l Council of Nonprofits, https://www.councilofnonprofits.org/running-nonprofit/ethics-accountability/financial-transparency-and-public-disclosure-requirements [https://perma.cc/AH2A-529W] (last visited Sep. 26, 2025) (advising that financial disclosures promote transparency and accountability to the public).

169. See supra Section II.D.

170. See Priority Guidance Plan, Internal Revenue Serv. (Oct. 2, 2025), https://www.irs.gov/privacy-disclosure/priority-guidance-plan [https://perma.cc/459E-B2CA] (showing that the IRS and the Treasury typically release updated priorities quarterly).

171. See Kwak, supra note 97, at 98 (debiasing through confronting with other viewpoints).

172. See Skinner-Thompson, supra note 126, at 455 (noting that comments without enough significance are ignored and that there needs to be some technical heft to comments).

173. See Linda Galler, Judicial Deference to Revenue Rulings: Reconciling Divergent Standards, 56 Ohio St. L.J. 1037, 1041–42 (1995) (discussing the unique characteristics of Revenue Rulings and their effects in practice); see also Joshua D. Blank & Leigh Osofsky, Simplexity, 66 Emory L.J. 189, 198 (2017) (discussing the importance of plain language rules, and the key decisions that must be made).

174. See supra Part II.

175. See I.R.C. § 42.

176. Blaine G. Saito, Collaborative Governance and the Low-Income Housing Tax Credit, 39 Va. Tax Rev. 451, 456–58 (2020).

177. See I.R.C. § 42(a)–(d).

178. See id. § 42(m).

179. See id. § 42(h)(6).

180. Saito, supra note 176, at 478–81 (discussing the IRS’s lack of capacity in monitoring the program).

181. Id. at 466–72.

182. See Treas. Reg. § 1.42-0–1.42-3, 1.42-5–1.42-6, 1.42-10, 1.42-17.

183. Saito, supra note 176, at 473–77; Tracy A. Kaye, Ogden Commons Case Study: A Comparative Look at the Low-Income Housing Tax Credit and Opportunity Zone Tax Incentive Programs, 48 Fordham Urb. L.J. 1067, 1084 (2021).

184. Saito, supra note 176, at 467–68, 471, 491–93.

185. Id. at 503.

186. Id. at 503–04.

187. See I.R.C. §§ 1400Z-1, 1400Z-2

188. Tax Cuts and Jobs Act, Pub. L. No. 115-97, § 13823, 131 Stat. 2183–88 (2017) (codified as amended at I.R.C. §§ 1400Z-1, 1400Z-2).

189. Kaye, supra note 183, at 1068.

190. See, e.g., Edward W. De Barbieri, Opportunism Zones, 39 Yale L. & Pol’y Rev. 82, 125–26 (2020); Michelle D. Layser, How Place-Based Tax Incentives Can Reduce Geographic Inequality, 74 Tax L. Rev. 1, 51–56 (2020); Blaine G. Saito, Agency Coordination and Opportunity Zones, 48 Fordham Urb. L.J. 1203, 1208–10 (2021); Jeff Ernsthausen & Justin Elliott, One Trump Tax Cut Was Meant to Help the Poor. A Billionaire Ended Up Winning Big., ProPublica (June 19, 2019, at 04:00 CT), https://www.propublica.org/article/trump-inc-podcast-one-trump-tax-cut-meant-to-help-the-poor-a-billionaire-ended-up-winning-big [https://perma.cc/5WME-DZUV]; Drucker & Lipton, supra note 5.

191. I.R.C. § 1400Z-1(b), (c)(1), (e).

192. Id. § 1400Z-1(b)(1)(B).

193. Id. § 1400Z-2.

194. Kaye, supra note 183, at 1068.

195. See supra Section II.D.

196. See, e.g., De Barbieri, supra note 190, at 124–25, 129, 135; Ernsthausen & Elliott, supra note 190; Drucker & Lipton, supra note 5.

197. Kaye, supra note 183, at 1100–01.

198. See Treas. Reg. § 1.1400Z2-0, 1.1400Z2(a)-1, 1.1400Z2(b)-1, 1.1400Z2(d)-1.

199. Kaye, supra note 183, at 1100–03; De Barbieri, supra note 190, at 153–55 (both discussing participation but highlighting groups that have such capacity to participate like Community Development Entities, Community Development Financial Institutions, and Local Governments).

200. See I.R.C. § 482.

201. See generally Treas. Reg. § 1.482-0–9t (these take up numerous pages in a printed volume of the Treasury Regulations).

202. Id. § 1.482-1(b); Id. § 1.482-1(c) (noting there are numerous methods to meet the arm’s length result and how the best and most reliable method is used to confirm). Id. § 1.482-8 (spelling out numerous applications of best method rule and providing many examples of methods).

203. Id. § 1.482-1(b)(1). Certain transactions have specifically defined methods, spelled out in Treas. Reg. § 1.482-2. Methods for transfers of tangible property are found at Treas. Reg. § 1.482-3. Methods for transfers of intangible property are found at Treas. Reg. § 1.482-4. Methods for services are found in Treas. Reg. § 1.482-9. Two methods that can apply in any instance that tend to look more at a division of profits rather than measuring against similar transactions are the comparable profits method, Treas. Reg. § 1.482-5, and the profit split method, Treas. Reg. § 1.482-6. When commonly controlled entities develop new intangible property pursuant to a cost sharing arrangement, where the entities split the various costs and risks, Treas. Reg. § 1.482-7 outlines these methods.

204. For example, MNEs with a U.S. parent that have their foreign subsidiaries subject to I.R.C. § 482, may also fall under the controlled foreign corporation or global intangible low-taxed income rules in I.R.C. §§ 951–965, which could affect an MNE’s desires to take certain transfer pricing positions.

205. E.g., Treas. Reg. § 1.482-3(b)(4), (c)(4), (d)(4), (e)(2); id. § 1.482-4(c)(4), (d)(2); id. § 1.482-5(e); id. § 1.482-6(c)(3)(iii); id. § 1.482-7(b)(1)(iv), (b)(4)(v), (b)(5)(iii), (c)(4)(ii), (c)(5), (d)(1)(iv), (d)(5), (e)(1)(iii), (e)(2)(ii)(E), (e)(2)(iii)(B), (f)(5), (g)(2)(ii)(B), (g)(2)(iii)(B), (g)(2)(v)(C); id. § 1.482-8(b).

206. See Galle & Shay, supra note 7, at 1670.

207. Paul Kiel, The IRS Decided to Get Tough Against Microsoft. Microsoft Got Tougher., ProPublica (Jan. 22, 2020, at 05:00 CT), https://www.propublica.org/article/the-irs-decided-to-get-tough-against-microsoft-microsoft-got-tougher [https://perma.cc/D98T-5GFH] [hereinafter Kiel, The IRS Decided to Get Tough Against Microsoft]; Paul Kiel, Who’s Afraid of the IRS? Not Facebook., ProPublica (Jan. 23, 2020, at 05:00 CT), https://www.propublica.org/article/whos-afraid-of-the-irs-not-facebook [https://perma.cc/F4NU-U3ZA] [hereinafter Kiel, Who’s Afraid of the IRS?]; Offshore Profit Shifting and the U.S. Tax Code—Part 1 (Microsoft and Hewlett-Packard): Hearing Before the Permanent Subcomm. on Investigations of the S. Comm. on Homeland Sec. & Gov’t Affs., 112th Cong. (2012) [hereinafter Microsoft and Hewlett-Packard Hearing] (statement of Prof. Reuven S. Avi-Yonah, Irwin I. Cohn Prof. of L., Univ. of Mich. Sch. of L.); Offshore Profit Shifting and the U.S. Tax Code—Part 2 (Apple Inc.): Hearing Before the Permanent Subcomm. on Investigations of the S. Comm. on Homeland Sec. & Gov’t Affs., 113th Cong. (2013) [hereinafter Apple Hearing] (statement of Prof. J. Richard Harvey, Villanova Univ. Sch. of L.).

208. See Kiel, The IRS Decided to Get Tough Against Microsoft, supra note 207.

209. See Kristen Donlevy & Robert Williams, What Can Nonprofits Expect from Future Federal Tax Policies?, CLA (Nov. 13, 2024), https://www.claconnect.com/en/resources/blogs/nonprofits/what-can-nonprofits-expect-from-future-federal-tax-policies [https://perma.cc/G9R3-5UCE]. For example, a U.S.-only domestic company is taxed on all of its income as if it were earned in the United States. It has no means to strip the income to a low tax jurisdiction using things like locating intangible property. Any part, even a subsidiary, if all of them are U.S.-based, are taxed in the United States. See I.R.C. §§ 61, 861, 881–885; see also International Taxation of Domestic Corporations, taxtake, https://www.taxtake.com/corporations/domestic/ [https://perma.cc/NT9X-XS8V] (last visited Sep. 22, 2025) (explaining how U.S. corporations may be taxed by the United States on foreign source income and on distributions to foreign shareholders).

210. I.R.C. § 199A; Treas. Reg. § 199A-1 (2025).

211. Oei & Osofsky, supra note 9, at 218–19.

212. Kamin et al., supra note 3, at 1459–60.

213. Id. at 1459–61.

214. Id. at 1460–63 (talking about the complex limitations and the holes in them).

215. See id. at 1461, 1463; Oei & Osofsky, supra note 9, at 218–19.

216. See Oei & Osofsky, supra note 9, at 217, 219, 260 (describing low salience as a result of hastiness). Some form of I.R.C. § 482 goes back many decades. I.R.S. Notice 88-123, 1988-2 C.B. 459–60.

217. See supra Section IV.C.

218. I.R.C. § 482 (describing transfer pricing as a power granted to the commissioner to allocate income between controlled entities in a way that properly reflects the income).

219. Olson, supra note 83, at 30.

220. See supra Sections IV.A.–B.; Michelle Lyon Drumbl, Tax Enforcement at the Intersection of Social Welfare and Vulnerable Populations, 2024 Wisc. L. Rev. 587, 594.

221. See supra Sections IV.A.–B.

222. See supra Section II.A.

223. See supra Section II.E.

224. See supra Section III.A. (discussing these groups’ goals and what their interest alignment may be in tax policy matters).

225. See supra Section III.A.

226. See supra Section III.A.

227. There are a few, like Citizens for Tax Justice, that exist, but they are sort of the exception that proves the rule. See, e.g., Our Principles, Citizens for Tax Just., https://ctj.org/principles [https://perma.cc/XW93-LU3T] (last visited Sep. 13, 2025).

228. See Julie Rovner, ‘Cadillac Tax’ on Generous Health Plans May Be Headed for Repeal, NPR (Aug. 14, 2019, at 05:00 ET), https://www.npr.org/sections/health-shots/2019/08/14/750859901/cadillac-tax-on-generous-health-plans-may-be-headed-to-congressional-junkyard [https://perma.cc/98TU-77LQ] (discussing the repeal of the ACA’s “Cadillac tax” and organized labor’s opposition).

229. Olson, supra note 83, at 36, 48.

230. Id. at 133–34.

231. See supra Sections IV.A.–B.

232. See supra Section IV.A.

233. See supra Section IV.B.

234. Kaye, supra note 183, at 1100.

235. See supra Section IV.C.

236. See supra Section IV.D.

237. For the idea of salience as knowing about what one’s tax liability is, see generally Raj Chetty, Adam Looney & Kory Kroft, Salience and Taxation: Theory and Evidence, 99 Am. Econ. Rev. 1145 (2009).

238. Id. at 1175.

239. Jason Parr, Why Don’t Retailers Include Sales Tax in Prices?, The Sales Tax People (June 9, 2025), https://sales.tax/expert-articles/why-prices-listed-without-sales-tax/ [https://perma.cc/SAV9-2QZF].

240. See Michael E. Graetz, Bringing International Tax Policy into the 21st Century, 83 Tax Notes Int’l 315, 315 (2016).

241. Kiel, The IRS Decided to Get Tough Against Microsoft, supra note 207; Kiel, Who’s Afraid of the IRS?, supra note 207; Microsoft and Hewlett-Packard Hearing, supra note 207; Apple Hearing, supra note 207.

242. E.g., Kiel, Who’s Afraid of the IRS?, supra note 207.

243. See id.

244. Graetz, supra note 240, at 317.

245. See Oei & Osofsky, supra note 9, at 218–19.

246. Part of that is the complexity. See supra Section IV.D.

247. See supra Section IV.D.

248. Such coordination is the flip side of internal government coordination to leverage expertise. See, e.g., Blaine G. Saito, Tax Coordination, 38 Ga. St. L. Rev. 735, 800 (2022); Saito, supra note 152, at 385–87, 390 (discussing how coordination between the IRS and other social service agencies should work and how values operating behind statutes can help point to how to coordinate and the intensity of such coordination).

249. See Galle & Shay, supra note 7, at 1655.

250. See Sugin, supra note 40, at 664.

251. See Galle & Shay, supra note 7, at 1655.

252. Id.

253. See Rahman, supra note 19, at 89–90 (noting that undertaking expertise alone leads to elite unaccountability, and the normative problem of undermining democracy).

254. See id. at 85, 89–90 (discussing the replication of paternalism and domination that is counter to the ideals of Anderson’s democratic equality).

255. Id. at 55, 66–68, 92, 96 (showing various strains of how the Progressive movement and the key thinkers of Dewey and Brandeis thought that public participation required citizens to stand besides experts and to engage and learn with them on important issues).

256. Id. at 35–36.

257. Id. at 44.

258. Id. at 41.

259. Id.

260. Id. at 41–43.

261. See Anderson, supra note 19, at 313 (noting the ideals of nondomination and standing as equalitarian with equal dignity required by democratic equality); Repetti, The Appropriate Roles for Equity, supra note 40, at 539–40 (discussing key nonmonetary and dignitarian related matters with regard to overall inequality in the tax system).

262. Repetti, The Appropriate Roles for Equity, supra note 40, at 567.

263. Hélène Landemore, Democratic Reason: Politics, Collective Intelligence, and the Rule of the Many 5 (2013) (discussing how even if the “brightest” are selected to run matters, they often miss important viewpoints). Landemore notes that a group of experts often gets stuck around a local optimum without exploring other points that can optimize. Id. at 103. These ideas are further developed below. See infra Section VI.B.

264. See Jeremy Bearer-Friend, Should the IRS Know Your Race? The Challenge of Colorblind Tax Data, 73 Tax L. Rev. 1, 52, 54–55, 59 (2019) (discussing significant flaws with the attempt to have colorblind tax data, and how it actually encourages problematic thinking that does not help on the dimension of race); Brown, supra note 12, at 203, 205.

265. See Bearer-Friend, supra note 264, at 50–51 (noting how colorblind tax data and an inability for experts to consider race lead toward a hampering of addressing distributional issues and undermine key democratic values).

266. See Nicholas Bagley, The Procedure Fetish, 118 Mich. L. Rev. 345, 400 (2019); Galle & Shay, supra note 7, at 1692–93.

267. Bagley, supra note 266, at 400.

268. Id. at 400–01.

269. Id. at 368, 389, 391.

270. Id. at 360–61, 364.

271. For example, Galle and Shay focus on trying to expand the scope of what are interpretative rules or good cause, the latter putting a greater thumb on the need of revenue. Galle & Shay, supra note 7, at 1696–98. Bagley has a host of options in changing doctrine to balance these needs. His solutions range from adopting more filters in notice and comment, an approach mentioned too by Professor Wagner, to determine what is vital rather than taking sheer numbers of similar comments as the sole touchstone, rethinking the logical outgrowth doctrine, lessening the bite of hard look review, expanding the exclusions to judicial review challenges especially pre-enforcement through mootness and the like. Bagley, supra note 266, at 395, 397–98.

272. Bagley, supra note 266, at 391–92 (observing that proceduralism may increase capture).

273. Id. at 399–401.

274. Sugin, supra note 40, at 664.

275. See id. (discussing various other scholars’ approaches to expanding standing).

276. See supra Section II.E.

277. See supra Section II.E.

278. Skinner-Thompson, supra note 126, at 411–12.

279. See id.

280. See id. at 412 & n.79.

281. Lawson, supra note 118, at 1163.

282. Id. at 564, 1156.

283. See id. at 564.

284. See Brett McDonnell & Daniel Schwarcz, Regulatory Contrarians, 89 N.C. L. Rev. 1629, 1639–40 (2011) (arguing that members of the group often have blinders and engage in groupthink that makes it hard to adapt to changes).

285. Jim Rossi & Kevin M. Stack, Representative Rulemaking, 109 Iowa L. Rev. 1, 42 (2023).

286. Id. at 42–43.

287. Id. at 47.

288. Landemore, supra note 263, at 43.

289. Anderson, supra note 19, at 313.

290. Landemore, supra note 263, at 90.

291. Id.

292. See id. (noting that ultimately cognitive diversity is counter to the ideas of capture and groupthink).

293. See id. at 102–03 (discussing how cognitive diversity even trumps ability and providing examples of deliberation that leads to better outcomes).

294. Repetti, The Appropriate Roles for Equity, supra note 40, at 567 (focusing on economic efficiency on tax policy matters).

295. Id.

296. Id.

297. Landemore, supra note 263, at 147, 160.

298. Id. at 147–48.

299. See id. (showing how majority rule improves outcomes, though it is secondary to deliberation).

300. See Oei & Osofsky, supra note 9, at 225–26, 234, 242 (noting almost no community or public interest organizations were involved in the development of the § 199A regulations).

301. See, e.g., Brown, supra note 12, at 202–03 (noting the importance of taxation in issues of racial social justice).

302. See generally Galle & Shay, supra note 7 (noting that increased participation has tilted matters in favor of powerful interests).

303. Anderson, supra note 19, at 316–19 (discussing capabilities).

304. Id. at 313.

305. Id. at 326.

306. Id.

307. Id.

308. Repetti, The Appropriate Roles for Equity, supra note 40, at 539, 545–46 (discussing literature showing how inequality leads to poor social outcomes that undermine Anderson’s capabilities access part of the theory).

309. Repetti, Democracy and Opportunity, supra note 58, at 1154, 1158.

310. See Taxes, supra note 13.

311. See id.

312. See id.

313. Kimberly J. Morgan & Andrea Louise Campbell, The Delegated Welfare State: Medicare, Markets, and the Governance of Social Policy 38 (2011).

314. Id. at 37–38.

315. This is because the income tax is a mass tax that touches almost every aspect of people’s lives. See Saito, supra note 152, at 384 (discussing the mass income tax).

316. See Internal Revenue Serv., Taxpayer Advoc. Serv., IRS Pub. No. 5066, LITC: Low Income Taxpayer Clinics (2024) (showing work with LITCs).

317. See Saito, supra note 152, at 418.

318. See, e.g., Vasiliki Papouliakou & Jost Angerer, Fact Sheets on the European Union: General Tax Policy 1, 1 (2025), https://www.europarl.europa.eu/factsheets/en/sheet/92/general-tax-policy [https://perma.cc/KTZ5-Q8S8] (explaining that E.U. tax policy decisions require unanimity).