Ten Truths About Tax Shelters

43 Pages Posted: 10 May 2001

See all articles by David A. Weisbach

David A. Weisbach

University of Chicago - Law School; Center for Robust Decisionmaking on Climate & Energy Policy (RDCEP)

Multiple version iconThere are 2 versions of this paper

Date Written: May 2, 2001

Abstract

This paper advances ten propositions about tax shelters and tax avoidance. The first four propositions argue that tax shelters must be analyzed solely by the consequences of shelters and the responses, rejecting reasoning based on notions such as the right to tax plan, legitimate tax planning, or statutory interpretation. The next three propositions analyze the consequences of tax shelters by viewing shelters as unintentional gaps in the tax base and attacks on shelters as similar to broadening the base. At the margin, the benefits of broadening the base must be set equal to the administrative costs of doing so and the propositions examine these costs and benefits in detail. The last three propositions discuss issues relating to implementing anti-shelter rules, including the problem of getting empirical estimates, and the role uncertainty and motive should play.

JEL Classification: E6, P43

Suggested Citation

Weisbach, David, Ten Truths About Tax Shelters (May 2, 2001). U Chicago Law & Economics, Olin Working Paper No. 122. Available at SSRN: https://ssrn.com/abstract=268831 or http://dx.doi.org/10.2139/ssrn.268831

David Weisbach (Contact Author)

University of Chicago - Law School ( email )

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Center for Robust Decisionmaking on Climate & Energy Policy (RDCEP) ( email )

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