Economic Substance and the Laws of Interest: A Comparison of Jewish and U.S. Federal Tax Law
Arizona State University (ASU) - Sandra Day O'Connor College of Law
July 28, 2009
HANDBOOK OF JEWISH LAW AND ECONOMICS, Oxford University Press, Forthcoming
Both Jewish law and U.S. Federal tax law define interest broadly as a payment for the use of money. Nonetheless, the two systems diverge widely when determining whether particular transactions involve interest. In particular, while both systems struggle with the question of when to respect the form of a transaction and when to take account of the underlying economic reality, they often resolve the question differently. Comparing the different approaches to the laws of interest reveals how underlying goals, practical constraints, and structure of the legal system affect the development of the law.
Number of Pages in PDF File: 26
Keywords: tax, taxation, interest, ribbis, halachah, ribbit, economic substance, comparative law, Jewish law
JEL Classification: H20, H24, K10, K34, P50, P51, Z10Accepted Paper Series
Date posted: July 29, 2009
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