Taxing capital appreciation
Resource Information
The work Taxing capital appreciation represents a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation. This resource is a combination of several types including: Work, Language Material, Continuing Resources.
The Resource
Taxing capital appreciation
Resource Information
The work Taxing capital appreciation represents a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation. This resource is a combination of several types including: Work, Language Material, Continuing Resources.
- Label
- Taxing capital appreciation
- Language
- eng
- Summary
- The realization rule - which defers tax on asset gains and losses until a disposition - is a well-known flaw in the income tax. Tax scholars have long recognized that the rule causes inequity, inefficiency, complexity, and revenue loss; allows wealthy taxpayers to avoid the income tax; and distorts the taxation of corporations and capital gains. The realization rule was a problem in the past, and a greater problem now, as financial innovations increase the opportunities for abuse and the need for reform. Prior proposals have generally favoured replacing the realization rule with an accrual method accounting for the timing of gains and losses, through mark-to-market taxation, which taxes observed changes in asset value, formulaic taxation, which taxes deemed changes in asset value, or a combination thereof in a mixed regime. While these proposals have attracted much academic interest, they have not gained political traction, due to concerns of administrative feasibility, taxpayer liquidity, behavioral distortions, and public acceptance. This article first introduces a framework for evaluating realization rule reform proposals, based on the rule's harms and justifications, and demonstrates that none of the prior proposals adequately satisfies the framework's criteria. It then introduces a new approach to taxing capital appreciation, "Deferred Tax Accounting", which integrates accrual principles within the current realization system. Deferred Tax Accounting has two components, a flexible payment rule for traded or regularly valued assets, and a retrospective rule for nontraded assets that are not regularly valued. Deferred Tax Accounting allows taxpayer choice in timing tax payments, and - as under current law - never requires payment of tax prior to a realization event
- Citation source
- In: Tax law review. - New York. - Vol. 70 (2016), no. 1 ; p. 111-176
- Geographic coverage
- North America
- Language note
- English
Context
Context of Taxing capital appreciationWork of
Embed
Settings
Select options that apply then copy and paste the RDF/HTML data fragment to include in your application
Embed this data in a secure (HTTPS) page:
Layout options:
Include data citation:
<div class="citation" vocab="http://schema.org/"><i class="fa fa-external-link-square fa-fw"></i> Data from <span resource="http://link.library.ibfd.org/resource/svRVs2TUgf0/" typeof="CreativeWork http://bibfra.me/vocab/lite/Work"><span property="name http://bibfra.me/vocab/lite/label"><a href="http://link.library.ibfd.org/resource/svRVs2TUgf0/">Taxing capital appreciation</a></span> - <span property="potentialAction" typeOf="OrganizeAction"><span property="agent" typeof="LibrarySystem http://library.link/vocab/LibrarySystem" resource="http://link.library.ibfd.org/"><span property="name http://bibfra.me/vocab/lite/label"><a property="url" href="http://link.library.ibfd.org/">International Bureau of Fiscal Documentation</a></span></span></span></span></div>
Note: Adjust the width and height settings defined in the RDF/HTML code fragment to best match your requirements
Preview
Cite Data - Experimental
Data Citation of the Work Taxing capital appreciation
Copy and paste the following RDF/HTML data fragment to cite this resource
<div class="citation" vocab="http://schema.org/"><i class="fa fa-external-link-square fa-fw"></i> Data from <span resource="http://link.library.ibfd.org/resource/svRVs2TUgf0/" typeof="CreativeWork http://bibfra.me/vocab/lite/Work"><span property="name http://bibfra.me/vocab/lite/label"><a href="http://link.library.ibfd.org/resource/svRVs2TUgf0/">Taxing capital appreciation</a></span> - <span property="potentialAction" typeOf="OrganizeAction"><span property="agent" typeof="LibrarySystem http://library.link/vocab/LibrarySystem" resource="http://link.library.ibfd.org/"><span property="name http://bibfra.me/vocab/lite/label"><a property="url" href="http://link.library.ibfd.org/">International Bureau of Fiscal Documentation</a></span></span></span></span></div>