Preferential Timing and Income Taxation
Theodore S. Sims
Boston University School of Law
July 24, 2013
Boston Univ. School of Law, Law and Economics Research Paper No. 13-31
I show that the value of preferential taxation of asset returns under an income tax that extends to property income is (a) strictly increasing in the taxpayer's marginal rate if the preference takes the form of a preferential rate; but that (b) it attains some maximum at a marginal rate between 0.5 and 1 if the preference takes the form of favorable timing. Disadvantageous timing has exactly the opposite properties.
Number of Pages in PDF File: 14
Keywords: tax deferral, preferential taxation, taxation and valuation, tax timing, capital income taxation, tax incentives
JEL Classification: D80, G11, H20, H21, H24, H25, K34
Date posted: August 4, 2013
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