A cost of tax planning

Yoram Margalioth; Eyal Sulganik; Rafael Eldor; Yoseph Edrey

doi:10.2202/1555-5879.1298

A cost of tax planning

Yoram Margalioth^*
, Eyal Sulganik
, Rafael Eldor
, Yoseph Edrey

^*Corresponding author for this work

Faculty of Law

Reichman University
University of Haifa

Research output: Contribution to journal › Article › peer-review

1 Scopus citations

Abstract

Tax planning is an area of growing interest and this paper is an attempt to contribute to the small formal literature on this topic. The paper analyzes the case of tax planning that manipulates the tax system to impose lower effective tax rates on gains than on losses, and proves that such tax planning may provide firms with an incentive to produce more than the social optimum. This inefficiency is different from the general inefficiency entailed by income taxation, captured by the conventional notion of excess burden. A low asymmetric tax may be more distortive than a high symmetric tax rate.

Original language	English
Article number	7
Journal	Review of Law and Economics
Volume	5
Issue number	1
DOIs	https://doi.org/10.2202/1555-5879.1298
State	Published - 2009

Funding

Funders
Cegla Center for Interdisciplinary Research of Law

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 17 Partnerships for the Goals

Access to Document

10.2202/1555-5879.1298

Cite this

@article{0f4b1ce17fcb441da13e02c4e9ba1371,

title = "A cost of tax planning",

abstract = "Tax planning is an area of growing interest and this paper is an attempt to contribute to the small formal literature on this topic. The paper analyzes the case of tax planning that manipulates the tax system to impose lower effective tax rates on gains than on losses, and proves that such tax planning may provide firms with an incentive to produce more than the social optimum. This inefficiency is different from the general inefficiency entailed by income taxation, captured by the conventional notion of excess burden. A low asymmetric tax may be more distortive than a high symmetric tax rate.",

author = "Yoram Margalioth and Eyal Sulganik and Rafael Eldor and Yoseph Edrey",

note = "Funding Information: * The authors would like to thank Michael Rabin for his invaluable help with the proof; David Weisbach for his excellent comments on an earlier version presented at a conference at the University of Michigan, and an anonymous referee for very helpful comments and suggestions that significantly improved the paper. Yoram Margalioth would also like to thank the Cegla Center for Interdisciplinary Research of Law for financial support.",

year = "2009",

doi = "10.2202/1555-5879.1298",

language = "אנגלית",

volume = "5",

journal = "Review of Law and Economics",

issn = "1555-5879",

publisher = "Walter de Gruyter GmbH",

number = "1",

}

TY - JOUR

T1 - A cost of tax planning

AU - Margalioth, Yoram

AU - Sulganik, Eyal

AU - Eldor, Rafael

AU - Edrey, Yoseph

N1 - Funding Information: * The authors would like to thank Michael Rabin for his invaluable help with the proof; David Weisbach for his excellent comments on an earlier version presented at a conference at the University of Michigan, and an anonymous referee for very helpful comments and suggestions that significantly improved the paper. Yoram Margalioth would also like to thank the Cegla Center for Interdisciplinary Research of Law for financial support.

PY - 2009

Y1 - 2009

N2 - Tax planning is an area of growing interest and this paper is an attempt to contribute to the small formal literature on this topic. The paper analyzes the case of tax planning that manipulates the tax system to impose lower effective tax rates on gains than on losses, and proves that such tax planning may provide firms with an incentive to produce more than the social optimum. This inefficiency is different from the general inefficiency entailed by income taxation, captured by the conventional notion of excess burden. A low asymmetric tax may be more distortive than a high symmetric tax rate.

AB - Tax planning is an area of growing interest and this paper is an attempt to contribute to the small formal literature on this topic. The paper analyzes the case of tax planning that manipulates the tax system to impose lower effective tax rates on gains than on losses, and proves that such tax planning may provide firms with an incentive to produce more than the social optimum. This inefficiency is different from the general inefficiency entailed by income taxation, captured by the conventional notion of excess burden. A low asymmetric tax may be more distortive than a high symmetric tax rate.

UR - https://www.scopus.com/pages/publications/67549119382

U2 - 10.2202/1555-5879.1298

DO - 10.2202/1555-5879.1298

M3 - ???researchoutput.researchoutputtypes.contributiontojournal.article???

AN - SCOPUS:67549119382

SN - 1555-5879

VL - 5

JO - Review of Law and Economics

JF - Review of Law and Economics

IS - 1

M1 - 7

ER -

A cost of tax planning

Abstract

Funding

UN SDGs

Access to Document

Other files and links

Fingerprint

Cite this