Toward Income Tax Accounting Consistency: Eliminating Accrual, Depreciation, and the Existing Tax Treatment of Borrowing

52 Pages Posted: 9 Dec 2015  

Joseph M. Dodge

Florida State University - College of Law

Date Written: December 7, 2015

Abstract

The thesis here is that inconsistent tax accounting rules undermine the individual income tax, and the best available move for improving it — given the unassailability of the realization principle — is to eliminate its accrual (and quasi-accrual) features. Specifically, the agenda is to eliminate tax accrual accounting in the conventional sense, revamp the tax treatment of borrowing to (inter alia) abolish the Crane doctrine, and eliminate depreciation deductions for indivisible productive assets. The end result would be a consistent cash realization system for (at least) individual taxpayers. The proposals made herein would upset long-standing features of the income tax and therefore are highly controversial. Nevertheless, these features create structural asymmetries that are systematically exploited to the advantage of taxpayers.

Suggested Citation

Dodge, Joseph M., Toward Income Tax Accounting Consistency: Eliminating Accrual, Depreciation, and the Existing Tax Treatment of Borrowing (December 7, 2015). 18 Florida Tax Review 1 (2015); FSU College of Law, Public Law Research Paper No. 780; FSU College of Law, Law, Business & Economics Paper No. 15-25. Available at SSRN: https://ssrn.com/abstract=2700212

Joseph M. Dodge (Contact Author)

Florida State University - College of Law ( email )

425 W. Jefferson Street
Tallahassee, FL 32306
United States
850-644-4590 (Phone)

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