The Case For (And Against) Surrogate Taxation

33 Pages Posted: 20 Sep 2019 Last revised: 17 Dec 2019

See all articles by Julie Roin

Julie Roin

University of Chicago Law School

Date Written: September 19, 2019


The 2017 Tax Cut and Jobs Act significantly revised long-standing rules regarding the tax treatment of many employer provided in-kind benefits. Instead of including the value of these benefits in the recipients’ taxable income, for the most part the new rules disallow employers a deduction for the cost of providing the affected benefits. This article argues that the two components of this legislative scheme – relying on cost of provision as the measure of taxable income and on imposing the nominal tax obligation on providers rather than recipients – are distinct policy decisions. It argues that the better approach would be to require employers to allocate their costs of providing benefits among recipients of those benefits.

Suggested Citation

Roin, Julie, The Case For (And Against) Surrogate Taxation (September 19, 2019). U of Chicago, Public Law Working Paper No. 723, Available at SSRN: or

Julie Roin (Contact Author)

University of Chicago Law School ( email )

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773-702-5314 (Phone)

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