Creating Failures in the Market for Tax Planning

20 Pages Posted: 5 Apr 2007  

Philip A. Curry

University of Waterloo

Claire A. Hill

University of Minnesota, Twin Cities - School of Law

Francesco Parisi

University of Minnesota - Law School; University of Bologna

Abstract

In this paper we consider the role of governments in designing their policy for tax planning strategies. We consider two distinct types of social costs: the cost associated with lost tax revenue, and the cost that arises from taxpayers' search for new methods to reduce their tax burden. Inevitably, reducing one of these costs comes at the expense of increasing the other; the government faces a tradeoff. By recognizing these costs and the tradeoff the government faces, we can better understand current tax policy. Moreover, a wider recognition of the tradeoff described above, and a systematic consideration of how to disrupt markets in tax planning activities, should lead to better tax policy.

Keywords: tax planning, tax enforcement policy, dissipation

JEL Classification: K34, H26, H29

Suggested Citation

Curry, Philip A. and Hill, Claire A. and Parisi, Francesco, Creating Failures in the Market for Tax Planning. Virginia Tax Review, Forthcoming; Minnesota Legal Studies Research Paper No. 07-07. Available at SSRN: https://ssrn.com/abstract=978245

Philip A. Curry

University of Waterloo ( email )

Waterloo, Ontario N2L 3G1
Canada

Claire Ariane Hill (Contact Author)

University of Minnesota, Twin Cities - School of Law ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States
612-624-6521 (Phone)

Francesco Parisi

University of Minnesota - Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States

University of Bologna ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

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