Preferential Timing and Income Taxation

14 Pages Posted: 4 Aug 2013  

Theodore S. Sims

Boston University School of Law

Date Written: July 24, 2013

Abstract

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.

Keywords: tax deferral, preferential taxation, taxation and valuation, tax timing, capital income taxation, tax incentives

JEL Classification: D80, G11, H20, H21, H24, H25, K34

Suggested Citation

Sims, Theodore S., Preferential Timing and Income Taxation (July 24, 2013). Boston Univ. School of Law, Law and Economics Research Paper No. 13-31. Available at SSRN: https://ssrn.com/abstract=2298126 or http://dx.doi.org/10.2139/ssrn.2298126

Theodore S. Sims (Contact Author)

Boston University School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States

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