Every year, billions of dollars are awarded as compensation for pain and suffering. A hard question – one that has vexed courts, legislators, and academics alike – is how we should tax them (if, indeed, we should tax them at all). In this Note, I articulate a new answer. If we take seriously the value of equality between injured people and uninjured people, we ought to tax compensatory damages for pain and suffering. In Part I, I criticize an influential approach to the taxation of compensatory damages for pain and suffering. This approach appeals to various intuitive normative principles to justify exempting pain and suffering damages from tax … (more)
Adam Kern, ‘Taxing Pain and Suffering’, New York University Law Review, volume 94, number 3 (June 2019).