The one-stop-shop in VAT and RST: common approaches to EU-US consumption tax problems

Richard Ainsworth
In March 2004 the European Commission solicited comments on a proposal to simplify value added tax (VAT) obligations through a one-stop scheme.[1] The proposal was modest in scope. It was designed to build upon the success of a similar scheme[2] that dealt with non-EU established persons supplying digital products to non-taxable EU persons.[3] That scheme is found in Article 26c of the Sixth VAT Directive.[4] In its...

Taxing Shared Economies of Scale

Bradley T. Borden
ABSTRACT Economies of scale exist if long-run average costs decline as output rises. All else being equal, the decline in average costs should lead to greater profitability, making economies of scale attractive to businesses. Nobel laureate George Stigler recognized that economies of scale should help determine the optimum size of a firm. To obtain economies of scale and optimum firm size, parties may integrate resources...

Gender and Tax

Edward Mccaffery
(forthcoming in GENDER AND POLITICS, Jyl Josephson and Susan Tolleson-Rinehard, eds. (M.E. Sharpe)) R. Michael Alvarez* and Edward J. McCaffery** INTRODUCTION Given the stakes involved, there has been surprisingly little empirical analysis of gender-based differences in attitudes towards specific aspects of taxation. Most of the literature on the so-called gender gap in political behavior has focused on the...

The Taxation of Retirement Saving: Choosing Between Front-Loaded and Back-Loaded Options

Leonard Burman
William G. Gale
David Weiner
Leonard E. Burman William G. Gale David Weiner ABSTRACT We examine retirement savers' choices between front- and back-loaded tax incentives, such as traditional and Roth IRAs, respectively. With equal dollar contribution limits, back­ loaded plans shelter more funds than front-loaded plans. This implies that Roth IRAs can be the preferred choice even for investors who expect their tax rates to fall in retirement....

No Deductions for Tax Planning And Controversy Costs

Calvin Johnson
Tax planning and tax litigation are too profitable for the taxpayer. The tax accounting for tax planning and controversy work allows an exemption for the reduction in tax achieved by the costs and also generally allows a deduction for the costs of the work. The mismatch of the exemption of the benefit and deduction of the costs gives a negative tax or subsidy. Costs that would routinely be profitable under neutral tax...

Toward a Consumption Tax, and Beyond

Roger Gordon
Roger Gordon Laura Kalambokidis Jeffrey Rohaly Joel Slemrod* Amid the academic debate about whether a tax based on consumption or income is superior, it has long been recognized that the U.S. federal tax system is in reality a hybrid of an income and consumption tax, with some elements that do not fit naturally into either system. In recent decades tax law changes that altered the nature of the hybrid were...

Why Tax Incentives may be an ineffective tool to encouraging Investment? The role of Investment Climate

Stefan Van Parys
Stefan Van Parys,* Sebastian James Abstract: In this paper we first analyze theoretically how the investment climate affects the impact of the corporate tax rate on investment. We do so in a model where the tax revenues are used to improve the investment climate. We find that if the investment climate is very effective at enhancing the productivity of capital, capital can react positively to a rise...

Catalogue of legal authority addressing the federal definition of tax partnership

Bradley T. Borden
I. INTRODUCTION The following Table of Legal Authority Addressing the Federal Definition of Tax Partnership presents a summary of numerous statutes, cases, regulations, and rulings (the legal authority) that address the federal definition of tax partnership. The Table is a work-in-progress.[1] Nonetheless, it may serve a useful purpose in its current unfinished condition. The Table is the byproduct of a law review...

Understanding Venture Capital Structure: A Tax Explanation for Convertible Preferred Stock

Ronald J. Gilson
David Schizer
The capital structures of venture capital-backed U.S. companies share a remarkable commonality: overwhelmingly, venture capitalists make their investments through convertible preferred stock.[1 ] Not surprisingly, a large part of the academic literature on venture capital has sought to explain this peculiar pattern.[2] Financial economists have developed models showing, for example, that convertible securities allocate...

The Correct Value of Tax Shields. An Analysis of 23 Theories

Pablo Fernandez
This paper provides clear, theoretically sound, guidelines to evaluate the appropriateness of 23 different valuation methods to estimate the present value of tax shields. We first show that the value of tax shields is the difference between the present values of two different cash flows with their own risk: the present value of taxes for the unlevered company and the present value of taxes for the levered company....
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