Reforming the Taxation of Derivatives - An Overview

Abstract

This brief essay outlines three benchmarks for evaluating alternative ways of taxing capital income, summarizes anticipatory, retroactive, and accrual-based proposals for reforming the taxation of derivatives, and offers guidelines for evaluating more limited reforms. It is intended as an introduction to key concepts, tensions, and ideas for reforming the taxation of financial instruments.

Keywords: tax reform, tax planning, derivatives, financial instruments

JEL Classification: K34, H24