Itemizing Personhood

This Article argues that tax law has a significant role in the design of nonmarket interactions. Tax law often translates real life into tax terms, and constructs our daily rituals as either nondeductible, personal consumption or deductible income-producing expenses. It depicts relationships as either taxable market transactions or as philanthropic, amicable, or domestic nonmarket ones. It characterizes some benefits as taxable fringe benefits and others as nontaxable psychological benefits. It taxes work but not leisure, sales but not gifts; it allows the deduction of travel expenses but not the costs of commuting, of secretarial help but not of childcare. In this Article, I argue that many of these notoriously puzzling distinctions express a set of closely related commitments to distinguish the market from the nonmarket realms. Drawing on the rich body of literature on commodification, the Article develops a new framework for the tax treatment of the nonmarket realm. It starts by identifying four distinct ways in which tax and commodification can interact: incentivizing nonmarket interactions; encouraging resource materialization; pricetagging of goods and services; and making the government a partner in taxable interactions. The Article then uses this framework to shed a new light on several controversial tax policy questions, such as taxing imputed income, taxing endowments, and disallowing personal deductions. The Article does not view commodification as inherently harmful. Rather, it identifies several novel strategies for using tax law in modularly managing commodification's various dimensions. Tax law's pliability, I argue, allows policymakers to distinguish the sore aspects of commodification from its other, potentially desirable functions, and to encourage only the latter. This analysis does not only provide a new perspective for evaluating tax policy, but also provides the commodification literature with a unique set of tools for effectively addressing commodification concerns.