A well-known baseline result in the theory of public finance says that firm investment decisions are not distorted by income taxation when taxable income is reduced by net economic depreciation and net interest costs. This paper extends this result to the commonly encountered situation in which firms use capital to produce other capital that they, in turn, use to produce final output — as when a firm uses a truck to construct a plant, or a laboratory to generate intellectual property. In theory, the immediate deduction of net economic depreciation and net interest costs is still sufficient for the no-distortion result — provided, that is, that net economic depreciation is suitably (and somewhat unnaturally) redefined. The required definition of net economic depreciation renders the no-distortion result especially problematic in the case of nested capital. Given informational constraints facing the tax authority, the no-distortion result is arguably inapplicable outside the steady state of the firm’s optimal investment path, which, in the case of nested capital, converges only asymptotically. In addition to establishing these results, the paper provides three interpretations of the non-distortive regime, and relates it to current law regarding interest capitalization and “depreciation cascading.”
{"title":"Self-Constructed Assets and Efficient Tax Timing","authors":"C. Sanchirico","doi":"10.2139/ssrn.2259748","DOIUrl":"https://doi.org/10.2139/ssrn.2259748","url":null,"abstract":"A well-known baseline result in the theory of public finance says that firm investment decisions are not distorted by income taxation when taxable income is reduced by net economic depreciation and net interest costs. This paper extends this result to the commonly encountered situation in which firms use capital to produce other capital that they, in turn, use to produce final output — as when a firm uses a truck to construct a plant, or a laboratory to generate intellectual property. In theory, the immediate deduction of net economic depreciation and net interest costs is still sufficient for the no-distortion result — provided, that is, that net economic depreciation is suitably (and somewhat unnaturally) redefined. The required definition of net economic depreciation renders the no-distortion result especially problematic in the case of nested capital. Given informational constraints facing the tax authority, the no-distortion result is arguably inapplicable outside the steady state of the firm’s optimal investment path, which, in the case of nested capital, converges only asymptotically. In addition to establishing these results, the paper provides three interpretations of the non-distortive regime, and relates it to current law regarding interest capitalization and “depreciation cascading.”","PeriodicalId":377417,"journal":{"name":"University of Pennsylvania Carey Law School","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134323040","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
R. May, R. Epstein, J. Hurwitz, Daniel A. Lyons, James B. Speta, C. S. Yoo
The House Energy and Commerce Committee has begun a process to review and update the Communications Act of 1934, last revised in any material way in 1996. As the Committee begins the review process, this paper responds to questions posed by the Committee that all relate, in fundamental ways, to the question: "What should a modern Communications Act look like?"The Response advocates a "clean slate" approach under which the regulatory silos that characterize the current statute would be eliminated, along with almost all of the ubiquitous 'public interest' delegation of authority found throughout the Communications Act. The replacement regime would have at its core a new competition-based standard that, except in limited circumstances, would require that the FCC's regulatory activities be tied to findings of consumer harm resulting from lack of sufficient competition. The FCC's authority to adopt broad anticipatory rules on an ex ante basis would be substantially circumscribed, and the agency would be required to rely more heavily than is presently the case on ex post adjudication of individual complaints alleging specific abuses of market power and consumer harm. Some aspects of the FCC's current jurisdiction, such as privacy and data security regulation, might be transferred to the FTC in light of the FTC's institutional competence in these areas.
{"title":"Response to Questions in the First White Paper, 'Modernizing the Communications Act'","authors":"R. May, R. Epstein, J. Hurwitz, Daniel A. Lyons, James B. Speta, C. S. Yoo","doi":"10.2139/SSRN.2389705","DOIUrl":"https://doi.org/10.2139/SSRN.2389705","url":null,"abstract":"The House Energy and Commerce Committee has begun a process to review and update the Communications Act of 1934, last revised in any material way in 1996. As the Committee begins the review process, this paper responds to questions posed by the Committee that all relate, in fundamental ways, to the question: \"What should a modern Communications Act look like?\"The Response advocates a \"clean slate\" approach under which the regulatory silos that characterize the current statute would be eliminated, along with almost all of the ubiquitous 'public interest' delegation of authority found throughout the Communications Act. The replacement regime would have at its core a new competition-based standard that, except in limited circumstances, would require that the FCC's regulatory activities be tied to findings of consumer harm resulting from lack of sufficient competition. The FCC's authority to adopt broad anticipatory rules on an ex ante basis would be substantially circumscribed, and the agency would be required to rely more heavily than is presently the case on ex post adjudication of individual complaints alleging specific abuses of market power and consumer harm. Some aspects of the FCC's current jurisdiction, such as privacy and data security regulation, might be transferred to the FTC in light of the FTC's institutional competence in these areas.","PeriodicalId":377417,"journal":{"name":"University of Pennsylvania Carey Law School","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125769297","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In the literature on optimal taxation, a “tag” is a government-observable taxpayer attribute that is effectively immutable – like blindness, race, gender, or even height. Conventional optimal tax theory prescribes that tags should be included in the tax base so long as they are in some way correlated with “ability” or “endowment” (more precisely, with “social welfare weight”: the marginal social welfare of transferring resources to the taxpayer). Such correlation is a weak requirement. And it has recently been pointed out that the list of seemingly absurd taxes and subsidies that are thereby deemed optimal poses a challenge to the basic framework of optimal tax theory in the form of a reductio ad absurdum. This paper attempts to draw a principled distinction between two ideal types of tags – those that are directly welfare-relevant and those that are welfare-relevant only when and if they are taxed or subsidized, and only through such taxation or subsidy. A stark distinction arises between these types when the optimal tax model is extended to include the realism-enhancing feature that the government is uncertain regarding the association in the population of taxpayers between the incidence of the tag and social welfare weight. It is shown that such uncertainty generally decreases the impetus for taxation or subsidy when the attribute is non-welfare relevant, but not when it is directly welfare-relevant.
{"title":"Good Tags, Bad Tags","authors":"C. Sanchirico","doi":"10.2139/SSRN.2295502","DOIUrl":"https://doi.org/10.2139/SSRN.2295502","url":null,"abstract":"In the literature on optimal taxation, a “tag” is a government-observable taxpayer attribute that is effectively immutable – like blindness, race, gender, or even height. Conventional optimal tax theory prescribes that tags should be included in the tax base so long as they are in some way correlated with “ability” or “endowment” (more precisely, with “social welfare weight”: the marginal social welfare of transferring resources to the taxpayer). Such correlation is a weak requirement. And it has recently been pointed out that the list of seemingly absurd taxes and subsidies that are thereby deemed optimal poses a challenge to the basic framework of optimal tax theory in the form of a reductio ad absurdum. This paper attempts to draw a principled distinction between two ideal types of tags – those that are directly welfare-relevant and those that are welfare-relevant only when and if they are taxed or subsidized, and only through such taxation or subsidy. A stark distinction arises between these types when the optimal tax model is extended to include the realism-enhancing feature that the government is uncertain regarding the association in the population of taxpayers between the incidence of the tag and social welfare weight. It is shown that such uncertainty generally decreases the impetus for taxation or subsidy when the attribute is non-welfare relevant, but not when it is directly welfare-relevant.","PeriodicalId":377417,"journal":{"name":"University of Pennsylvania Carey Law School","volume":"66 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130945601","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper analyzes the inflation sensitivity of real estate investments, comparing them to other inflation-sensitive assets. The most transparent source of real estate investment returns comes from publicly traded stocks of real estate investment trusts (REITs). The authors examine the available return data, with an emphasis on their relationship to US inflation, although conclusions may apply elsewhere as well.
{"title":"Inflation and Real Estate Investments","authors":"B. Case, Susan M. Wachter","doi":"10.2139/ssrn.1966058","DOIUrl":"https://doi.org/10.2139/ssrn.1966058","url":null,"abstract":"This paper analyzes the inflation sensitivity of real estate investments, comparing them to other inflation-sensitive assets. The most transparent source of real estate investment returns comes from publicly traded stocks of real estate investment trusts (REITs). The authors examine the available return data, with an emphasis on their relationship to US inflation, although conclusions may apply elsewhere as well.","PeriodicalId":377417,"journal":{"name":"University of Pennsylvania Carey Law School","volume":"137 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-11-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134217551","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This survey identifies and reviews the main approaches to modeling legal evidence: pure probabilistic deduction, the omission model, endogenous cost signaling, and correlated private information. The central mechanic of each approach is described and applications are provided. Approaches are evaluated and compared. Attempts to combine approaches are also examined.
{"title":"Models of Evidence: Survey and Assessment","authors":"C. Sanchirico","doi":"10.2139/ssrn.1704009","DOIUrl":"https://doi.org/10.2139/ssrn.1704009","url":null,"abstract":"This survey identifies and reviews the main approaches to modeling legal evidence: pure probabilistic deduction, the omission model, endogenous cost signaling, and correlated private information. The central mechanic of each approach is described and applications are provided. Approaches are evaluated and compared. Attempts to combine approaches are also examined.","PeriodicalId":377417,"journal":{"name":"University of Pennsylvania Carey Law School","volume":"30 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-11-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116587067","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Welfare polls are survey instruments that seek to quantify the determinants of human well-being. Currently, three welfare polling formats are dominant: contingent-valuation surveys, QALY surveys, and happiness surveys. Each format has generated a large, specialized, scholarly literature, but no comprehensive discussion of welfare polling as a general enterprise exists. This Article seeks to fill that gap. Part I describes the trio of existing formats. Part II discusses the actual and potential uses of welfare polls in government decisionmaking. Part III analyzes in detail the obstacles that welfare polls must overcome to provide useful well-being information, and concludes that they can be genuinely informative. Part IV synthesizes the case for welfare polls, arguing against two types of challenges: the revealed-preference tradition in economics, which insists on using behavior rather than surveys to learn about well-being; and the civic-republican tradition in political theory, which accepts surveys but insists that respondents should be asked to take a citizen rather than consumer perspective. Part V suggests new directions for welfare polls.
{"title":"Welfare Polls: A Synthesis","authors":"M. Adler","doi":"10.2139/ssrn.885521","DOIUrl":"https://doi.org/10.2139/ssrn.885521","url":null,"abstract":"Welfare polls are survey instruments that seek to quantify the determinants of human well-being. Currently, three welfare polling formats are dominant: contingent-valuation surveys, QALY surveys, and happiness surveys. Each format has generated a large, specialized, scholarly literature, but no comprehensive discussion of welfare polling as a general enterprise exists. This Article seeks to fill that gap. Part I describes the trio of existing formats. Part II discusses the actual and potential uses of welfare polls in government decisionmaking. Part III analyzes in detail the obstacles that welfare polls must overcome to provide useful well-being information, and concludes that they can be genuinely informative. Part IV synthesizes the case for welfare polls, arguing against two types of challenges: the revealed-preference tradition in economics, which insists on using behavior rather than surveys to learn about well-being; and the civic-republican tradition in political theory, which accepts surveys but insists that respondents should be asked to take a citizen rather than consumer perspective. Part V suggests new directions for welfare polls.","PeriodicalId":377417,"journal":{"name":"University of Pennsylvania Carey Law School","volume":"6 3","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-01-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120915085","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper establishes a theoretical and empirical link between the use of aggressive mortgage lending instruments, such as interest only, negative amortization or subprime, mortgages, and the underlying house price volatility. Such instruments, which come into existence through innovation or financial deregulation, allow more borrowing than otherwise would occur in previously affordability constrained markets. Within the context of a model with endogenous rent-buy decision, we demonstrate that the supply of aggressive lending instruments temporarily increases the asset prices in the underlying market because agents find it more attractive to own or because their borrowing constraint is relaxed, or both. This result implies that the availability of aggressive mortgage lending instruments magnifies the real estate cycle and the effects of fundamental demand shocks. We empirically confirm the predictions of the model using recent subprime origination experience. In particular, we find that counties and cities that receive a high concentration of aggressive lending instruments experience larger price increases and subsequent declines than areas with low concentration of such instruments. This result holds in the presence of various controls and instrumental variables.
{"title":"Subprime Lending and House Price Volatility","authors":"Andrey Pavlov, Susan M. Wachter","doi":"10.2139/ssrn.1316891","DOIUrl":"https://doi.org/10.2139/ssrn.1316891","url":null,"abstract":"This paper establishes a theoretical and empirical link between the use of aggressive mortgage lending instruments, such as interest only, negative amortization or subprime, mortgages, and the underlying house price volatility. Such instruments, which come into existence through innovation or financial deregulation, allow more borrowing than otherwise would occur in previously affordability constrained markets. Within the context of a model with endogenous rent-buy decision, we demonstrate that the supply of aggressive lending instruments temporarily increases the asset prices in the underlying market because agents find it more attractive to own or because their borrowing constraint is relaxed, or both. This result implies that the availability of aggressive mortgage lending instruments magnifies the real estate cycle and the effects of fundamental demand shocks. We empirically confirm the predictions of the model using recent subprime origination experience. In particular, we find that counties and cities that receive a high concentration of aggressive lending instruments experience larger price increases and subsequent declines than areas with low concentration of such instruments. This result holds in the presence of various controls and instrumental variables.","PeriodicalId":377417,"journal":{"name":"University of Pennsylvania Carey Law School","volume":"90 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-07-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122415682","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Originally prepared for the 2007 meetings of the Italian Association of Comparative Law, this paper seeks to excavate the roots of procedural complexity in modern American litigation. Proceeding from the view that there is no accepted definition of complex litigation in the United States, the paper discusses five related phenomena that the author regards as consequential: (1) the architecture of modern American lawsuits and the procedural philosophy that architecture reflects, (2) the volume of litigation and the public and private policies, attitudes and arrangements that affect it, (3) the dynamic nature of, and dispersed institutional responsibility for, American law, (4) the enormous amounts of money at stake in some litigation, and (5) the search for, and the forms of, relevant evidence in modern American litigation, and the impact of science and technology on both. The paper argues that, having opted for equity's approach to the joinder of claims and parties - in part to ensure effective enforcement of rights but also in part to make such enforcement more efficient - Americans have repeatedly turned to the tools of aggregation as a remedy for that success. In doing so, the people responsible for the courts often override the preferences of the parties (and thus the principle of party autonomy), alter the balance of power in litigation, and render trial effectively impossible. In such instances, they are creating complexity where it is not necessary for effective access to court; the stated goal of efficiency may be a delusion, and in any event aggregation can make little pretense to a goal of accuracy as opposed to dispute resolution simpliciter. Moreover, as the Class Action Fairness Act of 2005 suggests, in a federal system the unremitting quest for aggregation may come at a heavy price to individual state autonomy. In sum, taken to the extremes to which Americans appear to be heading, complex litigation appears to be a cure that has become a curse.
{"title":"The Complexity of Modern American Civil Litigation: Curse or Cure?","authors":"Stephen B. Burbank","doi":"10.2139/ssrn.993202","DOIUrl":"https://doi.org/10.2139/ssrn.993202","url":null,"abstract":"Originally prepared for the 2007 meetings of the Italian Association of Comparative Law, this paper seeks to excavate the roots of procedural complexity in modern American litigation. Proceeding from the view that there is no accepted definition of complex litigation in the United States, the paper discusses five related phenomena that the author regards as consequential: (1) the architecture of modern American lawsuits and the procedural philosophy that architecture reflects, (2) the volume of litigation and the public and private policies, attitudes and arrangements that affect it, (3) the dynamic nature of, and dispersed institutional responsibility for, American law, (4) the enormous amounts of money at stake in some litigation, and (5) the search for, and the forms of, relevant evidence in modern American litigation, and the impact of science and technology on both. The paper argues that, having opted for equity's approach to the joinder of claims and parties - in part to ensure effective enforcement of rights but also in part to make such enforcement more efficient - Americans have repeatedly turned to the tools of aggregation as a remedy for that success. In doing so, the people responsible for the courts often override the preferences of the parties (and thus the principle of party autonomy), alter the balance of power in litigation, and render trial effectively impossible. In such instances, they are creating complexity where it is not necessary for effective access to court; the stated goal of efficiency may be a delusion, and in any event aggregation can make little pretense to a goal of accuracy as opposed to dispute resolution simpliciter. Moreover, as the Class Action Fairness Act of 2005 suggests, in a federal system the unremitting quest for aggregation may come at a heavy price to individual state autonomy. In sum, taken to the extremes to which Americans appear to be heading, complex litigation appears to be a cure that has become a curse.","PeriodicalId":377417,"journal":{"name":"University of Pennsylvania Carey Law School","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-06-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114165188","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper takes a new look at the cross-border dividend-stripping transactions that gave rise to the Fifth Circuit's opinion in Compaq v. Commissioner and the Eighth Circuit's opinion in IES Industries v. Commissioner. In both cases, the circuit courts held for the taxpayers and rejected the Commissioner's claim that the transactions lacked economic substance because the taxpayers were sure to lose money on the transactions before taxes. These cases generated extensive commentary that was split into two diametrically opposed camps. One group argued that the decisions were correct because the transactions were economically profitable business transactions. The other group argued that the transactions were blatant, abusive tax shelters; and that the courts should have struck them down. Because the commentators in the second group conceded that the transactions generated a pre-tax profit, these commentators also offered a range of proposals to modify or replace the pre-tax profit test. Although the tax benefit of crossborder dividend-stripping was sharply reduced by subsequent Congressional enactments, that action hid rather than resolved the issue whether the tax shelter jurisprudence is fundamentally flawed because there is a class of abusive transactions that produce a guaranteed profit before tax, but do not run afoul of the anti-abuse provisions in the tax law.This paper argues that the Compaq and IES Industries transactions do not reveal any fundamental failings with either anti-abuse jurisprudence generally or the pre-tax profit test in particular. This paper demonstrates that the circuit courts reached the wrong conclusions in those cases because the parties, the courts, and the commentators all ignored implicit taxes. That is not surprising because the implicit taxes in these cases were difficult to see. These taxes were negative implicit taxes, which drove down the cum dividend price of the stripped stock, and therefore made the transactions appear profitable before taxes. However, once implicit taxes are taken into account, the transactions in those cases are properly understood to be unprofitable before taxes.Finally, nearly ten years ago, Charlotte Crane observed that tax doctrine has all but ignored implicit taxes and she challenged commentators, lawyers and judges to think carefully about how implicit taxes can be incorporated into tax doctrine. My proposal to calculate pre-tax profit for the purpose of anti-abuse jurisprudence before both implicit and explicit taxes is, I believe, the first proposal to explicitly recognize implicit taxes in tax doctrine.
{"title":"Compaq Redux: Implicit Taxes and the Question of Pre-Tax Profit","authors":"Michael S. Knoll","doi":"10.2139/ssrn.952022","DOIUrl":"https://doi.org/10.2139/ssrn.952022","url":null,"abstract":"This paper takes a new look at the cross-border dividend-stripping transactions that gave rise to the Fifth Circuit's opinion in Compaq v. Commissioner and the Eighth Circuit's opinion in IES Industries v. Commissioner. In both cases, the circuit courts held for the taxpayers and rejected the Commissioner's claim that the transactions lacked economic substance because the taxpayers were sure to lose money on the transactions before taxes. These cases generated extensive commentary that was split into two diametrically opposed camps. One group argued that the decisions were correct because the transactions were economically profitable business transactions. The other group argued that the transactions were blatant, abusive tax shelters; and that the courts should have struck them down. Because the commentators in the second group conceded that the transactions generated a pre-tax profit, these commentators also offered a range of proposals to modify or replace the pre-tax profit test. Although the tax benefit of crossborder dividend-stripping was sharply reduced by subsequent Congressional enactments, that action hid rather than resolved the issue whether the tax shelter jurisprudence is fundamentally flawed because there is a class of abusive transactions that produce a guaranteed profit before tax, but do not run afoul of the anti-abuse provisions in the tax law.This paper argues that the Compaq and IES Industries transactions do not reveal any fundamental failings with either anti-abuse jurisprudence generally or the pre-tax profit test in particular. This paper demonstrates that the circuit courts reached the wrong conclusions in those cases because the parties, the courts, and the commentators all ignored implicit taxes. That is not surprising because the implicit taxes in these cases were difficult to see. These taxes were negative implicit taxes, which drove down the cum dividend price of the stripped stock, and therefore made the transactions appear profitable before taxes. However, once implicit taxes are taken into account, the transactions in those cases are properly understood to be unprofitable before taxes.Finally, nearly ten years ago, Charlotte Crane observed that tax doctrine has all but ignored implicit taxes and she challenged commentators, lawyers and judges to think carefully about how implicit taxes can be incorporated into tax doctrine. My proposal to calculate pre-tax profit for the purpose of anti-abuse jurisprudence before both implicit and explicit taxes is, I believe, the first proposal to explicitly recognize implicit taxes in tax doctrine.","PeriodicalId":377417,"journal":{"name":"University of Pennsylvania Carey Law School","volume":"297 9","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-12-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120985666","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2006-03-01DOI: 10.1628/093245606776166516
Edward B. Rock
I examine the connection between the discursive dilemma and corporate law. The discursive dilemma (or doctrinal paradox) is a distinctive social choice problem that was first identified by Kornhauser and Sager and later used as the basis for a theory of organizational personality by Pettit. I examine the ways in which the corporate form prevents the emergence of the discursive dilemma in the firm context and the extent to which the presence of the discursive dilemma can provide the foundation for a theory of corporate personality.
{"title":"The Corporate Form as a Solution to a Discursive Dilemma","authors":"Edward B. Rock","doi":"10.1628/093245606776166516","DOIUrl":"https://doi.org/10.1628/093245606776166516","url":null,"abstract":"I examine the connection between the discursive dilemma and corporate law. The discursive dilemma (or doctrinal paradox) is a distinctive social choice problem that was first identified by Kornhauser and Sager and later used as the basis for a theory of organizational personality by Pettit. I examine the ways in which the corporate form prevents the emergence of the discursive dilemma in the firm context and the extent to which the presence of the discursive dilemma can provide the foundation for a theory of corporate personality.","PeriodicalId":377417,"journal":{"name":"University of Pennsylvania Carey Law School","volume":"50 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114890677","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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