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This article examines the economic performance of Malaysia under the Anwar administration in its first year. Despite global challenges, Malaysia's economy showed signs of recovery from the pandemic, driven by increased demand for electrical and electronic exports. The government implemented various economic initiatives, including the Madani Economy, to enhance the country's economic performance. The article also discusses macroeconomic stabilization policies, such as fiscal and monetary measures, that were introduced. It highlights the decline in economic growth over the past two decades, attributed to low levels of capital formation and innovation, as well as the decrease in the manufacturing sector's contribution to GDP. The Anwar administration has launched the Malaysia Madani vision and policy framework, focusing on social justice and democracy. The budget for 2023 was not ratified due to the dissolution of parliament, but an interim budget was tabled to ensure continued funding for government operations. The budget emphasized inclusive economic growth, institutional reforms, and addressing inequality. The administration also introduced the Madani Economy, the National Energy Transition Roadmap, and the New Industrial Master Plan to promote sustainable development, green energy, and revitalization of the manufacturing sector. The mid-term review of the Twelfth Malaysia Plan, 2021-2025, presented various policy proposals and strategies, including strengthening governance, improving social protection and healthcare services, and focusing on energy transition. The government's budget for 2024 aims to strengthen public finances through increased tax revenues and improved expenditure efficiency. Overall, the Anwar administration's policies reflect a [Extracted from the article]

The article provides an overview of the political and economic landscape in Malaysia in 2023. It discusses the return of political stability with Anwar Ibrahim as the new prime minister, but highlights criticism of the government's lack of progress in reforming governance and the economy. The text also mentions legal issues faced by politicians from different parties and the positions and actions of various political parties. It addresses controversies surrounding issues such as executive power, corruption, and race and religion. The article also touches on Malaysia's foreign policy, economic partnerships, and challenges faced by the government. [Extracted from the article]

This article discusses the ongoing case of Moore v. United States, which is currently being argued before the U.S. Supreme Court. The case revolves around the interpretation of the Sixteenth Amendment and whether it allows Congress to tax unrealized sums without apportionment among the states. The amicus briefs in the case focus on the original meaning of the phrase "taxes on incomes" and whether it includes a realization requirement. The outcome of the case could have significant implications for various tax provisions. The article provides a historical overview of the case and examines the arguments made by both sides regarding the historical understanding of the Constitution's language. It also explores the history of state income taxes and academic discussions surrounding the definition of income at the time of the amendment's adoption. The article concludes that there was no publicly understood consensus that realization was a requirement for an income tax, and that the Supreme Court's interpretation of the Macomber case to establish a universal realization requirement would be inconsistent with the intent of the Sixteenth Amendment. [Extracted from the article]

This document provides information on the tax implications of installment sales and the option for sellers to opt out of installment sale reporting. It discusses the allocation of consideration among different types of assets and the use of a one-day note in S corporation installment sales. The document also explores Section 1202 planning, which allows taxpayers to exclude gain on the sale of qualified small business stock, and explains how structuring a transaction as multiple sales can accelerate the benefit of the Section 1202 exclusion. It offers valuable insights for sellers considering installment sales and Section 1202 planning. [Extracted from the article]

The Black–Litterman model improves the Markowitz portfolio selection model by balancing capital asset pricing model portfolio returns with the investor’s views. The model allows investors to provide their insights by creating a subjective view of future expected returns from their knowledge and personal experience. Incorporating the investor’s views into the portfolio optimization process, however, can take time and effort. Some recent developments in finance have used machine learning techniques to estimate the expected returns and incorporate the investor’s views in new and innovative ways. In this article, the authors propose a new method to find the investor’s views using a combination of the long short-term memory model with support vector regression for use as inputs to the Black–Litterman model. Then the model is tested in two different markets: an emerging market (SET Index of the Thai equity market) and a developed market (Dow Jones Index of the US equity market). The experimental findings demonstrate that the portfolios constructed using our proposed approach consistently outperform buy-and-hold portfolios in both countries. [ABSTRACT FROM AUTHOR]

Recent trends in corporate venture capital (CVC) activities have added to the size and complexity of the financial system. Intuition suggests that in a period marked by spectacularly increasing start-up valuations, the opportunity to earn large capital gains increases the importance of corporate investors' financial motivations. Drawing on interviews with 12 Silicon Valley-based CVC units of global industrial companies, we examine if new trends in CVC investment represent a diversion from incumbents' traditional focus on improving the competitive advantage of their core businesses. Building on the theory of the financialization of non-financial companies, we investigate the relationship between the strategic and financial motivations of CVC investing. We extend theory by distinguishing between developments at the extensive and intensive margins. We argue that the commonly applied quantitative measures capture financialization only at the extensive margin. Qualitative data indicate that the hypothesis of financialization does not hold at the intensive margin. [ABSTRACT FROM AUTHOR]

Purpose: This article explores the value creation process from player sales in football to understand if the related capital gains correspond to significant increases in the stock value of selling companies. In addition, it aims to detect any potential drivers for higher (or slower) abnormal stock returns. Design/methodology/approach: The authors analyze all the capital gains of the Italian and Portuguese listed football companies (the only ones for which, based on their annual reports, it was possible to trace the net book value for each player sold and, consequently, if any, the related capital gain) from 2012 to 2020 and use event study analysis to calculate the abnormal returns of the football companies' stocks. Moreover, the authors use a multiple linear regression model to identify the factors affecting investors' reactions and value creation process intensity. Findings: The results show that, on average, the capital gains from player transfers in football are positive income components and produce statistically significant higher abnormal returns. In addition, the authors identified some relevant drivers related to their intensity which could guide the choices of corporate executives regarding future disposals of the multi-year performance rights of players in the roster. Research limitations/implications: This study considers only Italian and Portuguese football listed companies. It would be helpful to consider some of the companies from other countries which are also outstanding from the sports perspective, but, in practice, it was not possible due to the impossibility to trace the net book value of the single footballers sold in those clubs' public financial disclosure. Practical implications: The value relevance of the capital gains from player trading activities should increase their importance, creating cascade effects on several activities generating value for football clubs (youth sector management, player scouting, technical improvement of the players). In addition, financial data show that the capital gains from player transfers are a basic income of European football clubs nowadays. Their executives consider these operations recurrent and continually search for more valuable transfers. Hence, it is reasonable to think that they (will) choose the players to sell considering both sports and financial aspects. Originality/value: To the best of the authors' knowledge, this is the first study exploring the effects of capital gains from player trading activities on professional football clubs' stock value. The results obtained are even more relevant if one considers the importance these income components have in the profit formula of professional football clubs nowadays, also because of the negative repercussions caused by the recent COVID-19 pandemic. [ABSTRACT FROM AUTHOR]

This article explores the challenges and strategies involved in implementing factor investing for taxable investors. Factor investing involves constructing portfolios based on specific characteristics to outperform passive benchmark indices. However, the trading required for factor strategies can generate significant capital gains tax liabilities, potentially offsetting the outperformance. The authors propose incorporating tax management techniques into the portfolio implementation process to capture factor premiums while mitigating tax liabilities. They introduce a framework for assessing the risk of taxes outweighing factor premiums and discuss various tax management techniques. The article emphasizes the importance of tax efficiency in factor investing and provides a practical framework for incorporating tax management into the investment process. The authors conducted simulations and found that tax-managed factor strategies can deliver pre-tax factor alphas while mitigating capital gains taxes. However, there are performance differences across strategies, and tax efficiency and implementation differences should be considered. Another document discusses the quantification of risks in equity investment management using risk metrics such as tracking error, beta exposure to factors, and expected shortfall. It provides examples based on the value strategy to illustrate these risk concepts. The document emphasizes the importance of considering factors such as dispersion, correlation, and mean returns in assessing risk. It also introduces the concepts of risk attribution and covariance-based risk contributions. The goal is to provide library patrons with a deeper understanding of the drivers of poor investment outcomes and the factors that contribute to risk in equity investments. The article discusses the impact of capital gains taxes on factor strategy alphas for taxable investors and highlights the importance of tax management techniques [Extracted from the article]

Using unique real estate data that allow for accurately measured capital gains, we examine whether sell propensities depend on the magnitude of a seller's capital gain. We find that short-term sell propensities are flat over losses and increasing in gains. Consistent with their higher sell propensities, selling prices are lower for properties with larger gains. Large-sized short-term stock investments also have sell propensities that are flat over losses and increasing in gains, although the sell propensities of typical-sized short-term stock investments are V-shaped. Our findings provide empirical support for theories of realization utility. [ABSTRACT FROM AUTHOR]

When banks might become reluctant to lend, or retail investors less keen to support IPOs, PE turns to other PE firms to provide below investment grade financing and to other PE for secondary buyouts. One perspective places greater emphasis on operational restructuring: PE buys companies in need of ownership transition and growth capital or alternatively buys failing companies and turns them around. The PE firms look to acquire an initial platform company and then engage in mergers and acquisitions on the premise that once the company achieves a critical threshold in terms of scale, the value of the whole when exited is greater than the sum of the acquired smaller entities. [Extracted from the article]

Copyright of Zeitschrift für Abgaben-, Finanz- und Steuerrecht is the property of Verlag Oesterreich GmbH and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Underlying assets are one of the required instruments for issuing sukuk to attract investors to invest in the Sharia capital market. Green sukuk is one of the sharia investment instruments issued by companies for retail sukuk products and has the aim of obtaining funding through debt securities or securities to encourage the company's growth and development performance through underlying assets. This research aims to determine the effect of dividends and capital gains on the underlying assets in retail sukuk. This research method uses a quantitative method with a descriptive approach. In collecting data, the random sampling method was used, where the research determined the number of samples using the Slovin method to know the number of samples and determine the sample categories for distributing questionnaires. The results of dividend research do have a significant influence on underlying assets. Based on the graph, dividend distribution has increased every year, thereby influencing the growth performance of underlying assets. A company will be said to be good if the income it earns is greater than its expenses, so it affects the company's assets. While capital gains also have a significant effect on the underlying assets in retail sukuk, it does not rule out the possibility that they will be influenced by other factors that are related to capital gains. Underlying aset merupakan salah satu instrumen yang diperlukan dalam penerbitan sukuk untuk menarik minat investor berinvestasi di pasar modal syariah. Green sukuk merupakan salah satu instrumen investasi syariah yang diterbitkan perusahaan untuk produk sukuk ritel dan bertujuan untuk memperoleh pendanaan melalui surat utang atau surat berharga untuk mendorong pertumbuhan dan perkembangan kinerja perusahaan melalui aset yang mendasarinya. Penelitian ini bertujuan untuk mengetahui pengaruh dividen dan capital gain terhadap underlying asset pada sukuk ritel. Metode penelitian ini menggunakan metode kuantitatif dengan pendekatan deskriptif. Dalam pengumpulan data digunakan metode random sampling, dimana penelitian menentukan jumlah sampel dengan menggunakan metode Slovin untuk mengetahui jumlah sampel dan menentukan kategori sampel untuk penyebaran kuesioner. Hasil penelitian dividen memang mempunyai pengaruh yang signifikan terhadap aset dasar. Berdasarkan grafik, pembagian dividen mengalami peningkatan setiap tahunnya sehingga mempengaruhi kinerja pertumbuhan aset dasar. Suatu perusahaan akan dikatakan baik apabila pendapatan yang diperoleh lebih besar dibandingkan dengan pengeluarannya, sehingga mempengaruhi kekayaan perusahaan. Meskipun capital gain juga berpengaruh signifikan terhadap aset dasar sukuk ritel, namun tidak menutup kemungkinan hal tersebut akan dipengaruhi oleh faktor lain yang terkait dengan capital gain.

The General Tax Directorate has recently followed the courts' criteria regarding the effects of regularising transactions falling within the scope of the tax neutrality regime applicable to mergers and other reorganisations. It analyses whether the regularisation of a stock exchange transaction could lead to the taxation of deferred capital gains under the tax neutrality regime. In its consultation, the public authority clarifies that the antiabuse rule under the neutrality regime requires a comprehensive examination of the transaction and cannot be automatically triggered in the absence of valid economic reasons. Moreover, in these cases, the deferral inherent to the neutrality regime cannot constitute the tax benefit that would be removed following a regularisation by the audit and control bodies. [ABSTRACT FROM AUTHOR]

The article explores the strategic advantages, challenges, and recommendations for utilizing discretionary trusts within consolidated groups in the dynamic landscape of Australian taxation. Topics include mitigating dividend traps, enhanced asset protection, flexibility in distributions, and tax-efficient income accumulation within consolidated groups, shedding light on the complexities and pitfalls associated with discretionary trusts in this context.

The article explores the distinctions between "deferred consideration" and "earnouts" in share purchase agreements, emphasizing that deferred consideration is generally non-contingent, and delves into tax implications for sellers. Topics include the legal and tax characterization of deferred consideration, the difference between reverse earnouts and deferred consideration sale structures, and a case where the Australian Taxation Office treated an earnout as deferred consideration.

The article discusses a recent decision by the Administrative Appeals Tribunal (AAT) regarding an individual taxpayer's deductible loss on the purchase and sale of a residential property. Topics include the AAT's analysis of Mrs. Bowerman's motivations, the application of Myer Emporium principles, and considerations related to the income year for claiming the deduction.

The article discusses key federal tax developments in November 2023, addressing issues such as the Australian Taxation Office's actions against promoters of tax exploitation schemes, the impact of the Bains case decision, and the draft law companion ruling on corporate collective investment vehicles. Topics include promoter penalties, the Bains case decision impact, and corporate collective investment vehicle regime.

This article explores the taxable capacity and tax effort of countries in Sub-Saharan Africa (SSA). It finds that middle-income countries tend to have higher tax ratios compared to low-income countries. The presence of oil reserves negatively impacts the taxable capacity of SSA countries, suggesting a lack of focus on tax collection in oil-producing nations. The study recommends international organizations provide technical assistance to improve taxation of mining rent and calls for regional coordination and macroeconomic policies to expand the taxable base and enhance tax performance in the region. [Extracted from the article]

Copyright of FinanzRundschau is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of FinanzRundschau is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The progressive harmonization of corporate financial information, based on the International Financial Reporting Standards, has moved fair value accounting (FVA) to the forefront of a debate that straddles accounting and corporate tax. Given the subjectivism that FVA may exhibit, especially when mark to market is not available and mark to model is used as in level 3 FVA, tax legislators have strongly restricted its impact on the corporate tax base. This paper argues that while the Portuguese corporate tax legislators explicitly followed this worldwide trend of restricting the tax impact of fair value to certain circumstances when market prices are observable (level 1 FVA), the corporate tax code has, nonetheless, several important avenues through which FVA influences taxable income determination. The main purpose of this paper is to present and discuss some important ways through which FVA may influence taxable income determination in Portugal, such as goodwill, impairment charges, transfer pricing, capital gains and exit taxation. Thus, the question emerges: is FVA returning through the window to impact the corporate tax base? Considering the global trends in public finance, and the need for present and future tax revenues, we believe this is an important topic to be addressed. [ABSTRACT FROM AUTHOR]

Copyright of Contaduría y Administración is the property of Facultad de Contaduria y Administracion-Universidad Nacional Autonoma de Mexico and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Scientific Journal of the Military University of Land Forces is the property of Gen. Tadeusz Kosciuszko Military Academy of Land Forces and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We discuss developments involving listed transactions, amicus briefs, tax exceptionalism, the Anti-Injunction Act, the "mailbox rule," nonrecognition provisions, income and deduction issues, FBAR penalties, basis, the shared responsibility payment and bankruptcy law, Washington's capital gains tax, and a few "way-out-there" taxpayer arguments. [ABSTRACT FROM AUTHOR]

In this paper, we use comprehensive administrative data on the population of Norway to create a measure of lifetime resources, which generates several stylized facts. First, lifetime resources are highly correlated with net wealth, but net wealth is more unequally distributed. Second, labor income is the most important component of lifetime resources, except among the top 1 percent where capital income and capital gains on financial assets become important. Lastly, lifetime resources are a better predictor of child human capital outcomes than net wealth, suggesting that, in some cases, inequality in lifetime resources may be more relevant than inequality in wealth. [ABSTRACT FROM AUTHOR]

The article focuses on important federal tax developments in September 2023. Topics covered include proposed amendments for small business entities to increase the instant asset write-off threshold, provisions to support small and medium businesses in energy efficiency and electrification, and the creation of a new class of deductible gift recipients.

The article focuses on the implications of contract timing on taxation, specifically in the context of capital gains tax (CGT) events and the CGT discount capital gain concession. It discusses the relevance of contract timing for events such as CGT event A1 and event D1, and emphasizes the application of general contract law principles when determining the existence of a binding contract, referencing recent legal cases to illustrate these principles.

The Australian Taxation Office (ATO) provides guidance that the value of a new crypto asset received from a chain split is not treated as either ordinary income or capital gain at the time of the split, provided the owner holds it a s a capital asset rather than in connection with carrying on a business. This article considers whether this guidance is well founded in cases where the crypto assets involved are cryptocurrency coins. In a chain split, the digital ledger on which cryptocoins are traded divides into two forks, resulting in two distinct cryptocurrencies. Each owner of a cryptocoin before the chain split ends up owning two separate coins, one of each of these cryptocurrencies. In its guidance, the ATO further provides that a chain split is generally not a capital gains tax (CGT) event unless the holder's rights and relationships with respect to both post-split coins have changed, in which case the chain split will be treated as an abandonment of the original coin (CGT event C2). In all cases, any new cryptocoin is assigned a zero-cost base, which is consistent with treating the coin as though it were found property. In this article, the authors question whether the ATO's approach is consistent with the nature of cryptocurrency chain splits and with settled tax law, arguing that the approach can lead to tax outcomes that differ significantly from economic reality. The authors suggest that the ATO may have erred by identifying either of the post-split coins as newly found and by considering the original coin to be lost or abandoned in some circumstances. The authors argue that cryptocurrency chain splits are more akin to property divisions (such as land subdivisions), and suggest that it would be more appropriate to apportion the cost base of the original coin between the two post-split coins using the split asset method applied in tax cases involving land subdivisions. This conclusion is based on a finding that the coin owner's rights and relationships with respect to both post-split coins remain unchanged from those associated with the original coin. This article's chief contribution is to explore the meaning of rights and relationships with respect to cryptocurrency and to show that, while it may be convenient to refer to one of the post-split coins as new, in fact, each post-split coin is a continuation of the original coin, much as two post-division lots of land are merely a continuation of the larger lot of land before subdivision. Both postsplit coins, like both post-division lots, literally trace their chain of title back to the original asset. The authors believe that further research may be necessary to establish how crypto assets other than cryptocoins, including non-fungible tokens, should be treated in the event of a chain split. [ABSTRACT FROM AUTHOR]

This paper investigates hedge funds’ ability to time industry-specific returns and shows that funds’ timing ability in the manufacturing industry improves their future performance, probability of survival, and ability to attract more capital. The results indicate that the best industry-timing hedge funds in the manufacturing sector have the highest return exposure to earnings surprises. This, together with persistently sticky earnings surprises, transparent information environment in regards to earnings releases, and large post-earnings-announcement drift in the manufacturing industry, explain to a great extent why best-timing hedge funds can generate significantly larger future returns compared to worst-timing hedge funds [ABSTRACT FROM AUTHOR]

It is surprisingly complicated to ascertain the amount of Social Security benefits that your clients must include in their taxable income. The good news is that at least 15 percent of Social Security retirement benefits are excluded from tax, and in some cases, Social Security benefits are totally exempt. In addition, clients who are able to lower their adjusted gross income (e.g., by taking tax-free Roth or health savings account (HSA) distributions instead of taxable retirement distributions) may decrease or eliminate the amount of their Social Security income that is subject to taxation. The bad news is that tax-exempt bonds and harvested capital gains lose some of their luster if the taxation of Social Security benefits is a concern for your client. [ABSTRACT FROM AUTHOR]

This paper studies the idiosyncratic risk component of individual house capital gains using data on resales and intermediate capital investments. The idiosyncratic component is large; its dynamics do not follow a random walk; and its magnitude is associated with proxies of information quality and market liquidity at the level of individual properties. Accounting for idiosyncratic risk substantially changes the assessment of the risk-return trade-off for housing: it reduces Sharpe ratios and makes them holding period dependent. I use a simple quantitative portfolio model to show that homeowners may be willing to make significant payments to insure against idiosyncratic housing risk. [ABSTRACT FROM AUTHOR]

Real estate—housing in particular—is a less profitable investment in the long run than previously thought. We hand-collect property-level financial data for the institutional real estate portfolios of four large Oxbridge colleges over the period 1901–1983. Gross income yields initially fluctuate around 5%, but then trend downward (upward) for agricultural and residential (commercial) real estate. Long-term real income growth rates are close to zero for all property types. Our findings imply annualized real total returns, net of costs, ranging from approximately 2.3% for residential to 4.5% for agricultural real estate. [ABSTRACT FROM AUTHOR]

Copyright of Zeitschrift für Stiftungswesen is the property of Verlag Oesterreich GmbH and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The article focuses on pending changes to Non-Arm's Length Expenditure (NALE) rules in Australia's Self-Managed Superannuation Fund (SMSF) sector, highlighting the risks faced by SMSF trustees due to the current provisions and proposed amendments. It discusses the controversy surrounding NALE provisions, the potential impacts on superannuation funds, and the need for flexibility in rectifying inadvertent oversights to prevent substantial tax liabilities.

As Stewart convincingly argues, these issues call the resilience of the tax state into question. Stewart has spent her career studying what she terms the "tax state": this book is a tour of the intellectual history of the idea. JG/AG: You quote Christopher Hood, who asks: "Is the twentieth-century advance of the tax state in the developed countries best seen as a historical aberration, from which we might expect a reversion to more historically normal levels?" Professor Stewart asks us to consider: "how well placed is the tax state for success in the twenty-first century?". [Extracted from the article]

Copyright of Galician Journal of Economics / Revista Galega de Economía is the property of Universidad de Santiago de Compostela, Servicio de Publicaciones and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In the optimal design of tax reform proposals, and in decisions about when and how to recommend them, it is useful to take explicit account of issues of political feasibility. In the United States—and probably around the world—important political barriers work against the enactment of major progressive tax reforms. A close look at US poll and survey data indicates that opposition by the general public is not a significant barrier: large majorities favour progressive taxation in general and favour a number of specific progressive tax changes, including higher top personal income tax rates; higher taxes on corporations; increased taxation of realized capital gains; and taxation of unrealized gains at death. But there exist other serious political barriers against tax reform, including an institutional status quo bias that makes any major policy change (especially any progressive change) very difficult; and strong political opposition from business corporations and wealthy individuals. The best available evidence indicates that nearly all US business firms, and most multi-millionaires and billionaires, oppose practically any sort of progressive tax reform. The best evidence also indicates that these firms and individuals exercise far more influence on policy-making than ordinary citizens do. We mention some possible strategies for dealing with this problem. [ABSTRACT FROM AUTHOR]

Using anonymized administrative data on the population of UK taxpayers, we show that—in line with high-profile anecdotes about the tax affairs of the rich—effective average tax rates (EATRs) decline at the top of the distribution of income and capital gains. We also document substantial variation in EATRs within remuneration level: a quarter of those in the top 1 per cent pay headline rates, while another quarter pay at least 9pp less than the headline rate. Most of this effect is driven by the composition of remuneration, with investment income having lower tax rates and capital gains having lower rates still. If all individuals with income above £100,000 paid the headline rates, this would raise tax revenue on income and gains by £23 billion on a static basis, an increase of 27 per cent in the tax paid by this group. [ABSTRACT FROM AUTHOR]

This paper reviews recent developments in the theory and practice of optimal capital taxation. We emphasize three main rationales for capital taxation. First, the frontier between capital and labour income flows is often fuzzy, thereby lending support to a broad-based, comprehensive income tax. Next, the very notions of income and consumption flows are difficult to define and measure for top wealth holders where capital gains due to asset price effects dwarf ordinary income and consumption flows. Therefore the proper way to tax billionaires is a progressive wealth tax. Finally, as individuals cannot choose their parents, there are strong meritocratic reasons why we should tax inherited wealth more than earned income or self-made wealth for which individuals can be held responsible, at least in part. This implies that the ideal fiscal system should also include a progressive inheritance tax, in addition to progressive income and wealth taxes. We then confront our prescriptions with historical experience. Although there are significant differences, we argue that observed fiscal systems in modern democracies bear important similarities with this ideal triptych. [ABSTRACT FROM AUTHOR]

This paper considers the role of capital gains taxation in enhancing tax progressivity, and argues that capital gains are the Achilles' heel of taxing the rich more effectively. We revisit the key aspects of how capital gains are taxed and address the main arguments against taxing capital gains more heavily: (i) it would discourage socially beneficial activities, such as innovation, (ii) implementing structural changes is unadministrable, and (iii) the 'lock-in' effect means that increasing the tax rate is an inefficient way to raise revenue. To address concerns with the unpopularity of taxing unrealized gains during one's lifetime and retroactive taxes, we conclude with a partial proposal for constructive realization at death that would apply only to gains accrued after a certain date, while allowing for discounted pre-payments of tax liability. [ABSTRACT FROM AUTHOR]

To assess the constitutionality of an unapportioned federal wealth tax, and/or of a federal income tax provision reaching wealthy taxpayers' unrealized gains, one needs an underlying framework for making judgements about legal claims. While no such framework can be entirely specified, at least to general agreement, this does not support nihilistically rejecting all comparative judgements about better versus worse, or more versus less convincing, instances of legal analysis. While it appears nearly certain that the Supreme Court's current right-wing majority would strike down an unapportioned federal wealth tax, the 'correct' answer to this constitutional question cannot be proven to general agreement. I myself would disagree with such a holding by the Court. An important variable in resolving the issue for oneself is how much continuing precedential weight one should give to Pollock v. Farmers' Loan & Trust Co. —a case that itself blatantly disrespected precedent, but that did so more than a century ago, and that (on the other hand) some argue has already ceased to be good law. The principle of respecting precedent both has instrumental value and has been long (if fitfully) honoured within the American legal system, but all agree that its weight is not absolute. An unapportioned minimum income tax on the wealthiest Americans that included in income their unrealized capital gains would likely be constitutional under currently prevalent legal doctrine. It is true, however, that Eisner v. Macomber (1920), if it were held to remain good law beyond its immediate facts, would support holding it unconstitutional. The prospect that the current Supreme Court's six right-wingers will decide to revive Macomber provides only one reason for suspecting that they might strike down such a provision, perhaps while also launching a broader constitutional war against central tenets of the current regime for taxing wealthy individuals and capital income. However, it lies beyond the power of conventional legal analysis to predict either what form such a war would take, or on what terms it might end up being resolved. [ABSTRACT FROM AUTHOR]