The Section 734(b) Basis Adjustment Needs Repair
The partnership tax provisions – Subchapter K of the Internal Revenue Code – work pretty well. And they have a difficult job to do because they must provide a reasonable mechanism for taxing arrangements between parties that can be far from off-the-rack. It should not be difficult to figure out how to tax two individuals [...]
How to Raise $1 Trillion without a VAT or a Rate Hike
We should be able to raise at least $1 trillion more revenue a year within the current income tax system just by making our tax accounting better reflect economic income. Our system has too many tax pits, which absorb revenue and distort investment decisions. We allow deductions for fictitious losses. We should tax high-class consumption [...]
Up or Down? Capital Income Taxation in the United States and the United Kingdom
Abstract Empirical evidence suggests that the Effective Marginal Tax Rate (EMTR) on income from capital has increased considerably in both the United States and the United Kingdom over the period 1982-2005. This evidence contradicts the corporate tax literature which predicts that the EMTR should instead fall over time as a result of increasing international capital [...]
Cross-Border Outsourcing: U.S. International Tax Pitfalls, Pratfalls, And Opportunities
I. INTRODUCTION Broadly defined, “outsourcing” occurs when a business contracts with a third party to provide goods or perform services that traditionally have been provided or performed in-house.[1] Faced with increasing global competition, businesses have come to look to outsourcing as a means of gaining a comparative advantage over their competitors.[2] Outsourcing is thought to [...]
Should Alcohol Taxes Be Raised?
Although excise taxes on beer, wine, and spirits raise about $15 billion a year in revenue for federal and state governments, current alcohol tax rates in the United States are low by historical standards. In 1980, alcohol taxes represented about 22 percent of the pre-tax price of alcohol, whereas now, with the failure to raise [...]
The Tax Immunity of E-Readers in Brazil
ABSTRACT The paper explores the broadening of the tax immunity in article 150, incise VI, letter “d” of the brazilian Federal Constitution with a view to reach e-readers. Through study of the constitutional history of the norm, it elaborates a definition for tax immunity for the purpose of interpretation. The paper defends using a three-part [...]
The value of tax shields and the risk of the net increase of debt
Abstract The value of tax shields depends upon the nature of the stochastic process of the net increase of debt, and does not depend upon the nature of the stochastic process of the free cash flow. The value of tax shields in a world with no leverage cost is the tax rate times the debt [...]
Closing Deferred Revenue
Under current law, taxpayers can receive cash but not pay tax on it because the cash is considered deferred revenue. When a taxpayer writes an option or sells stock short, for example, the taxpayer receives cash, but the cash is not considered gain or loss until the option is exercised or until the short sale [...]
Percentage Depletion of Imaginary
Costs Of all the dispensations . . . percentage depletion is the most remarkable achievement. It enables certain taxpayers to reduce their incomes by imaginary costs. Other taxpayers are not considered so deserving. They may only deduct what they spend. .— Louis Eisenstein, Ideologies of Taxation[1] The proposal would limit the exclusions allowed under percentage [...]
Tax on Insurance Buildup
Andrew Pike Eric A. Lustig Life insurance contracts often combine a savings or investment element with pure insurance protection that covers the risk of death during the year. Current law will tax the buildup in the value of a ‘‘life insurance contract’’ only if the policy is surrendered for its cash value during life. If [...]
End Tax-Free Monetization of Wealth
Cash withdrawn from appreciated property using financial instruments has become a major source of untaxed support for the standard of living of our wealthiest citizens. The proposal would treat cash received under a contract for sale of property or for writing an option on property as realization of gain to the extent the taxpayer or [...]
Taxation of the Really Big House
A. Overview Serious long-term tax reform will need to limit the considerable tax advantages now available in owning the very largest houses and other personal-use properties. The primary return from the investment in residences and similar property is the rental value of the personal use of the house, which is always tax exempt. If the [...]
