scholarly journals Accrued Gains are not Income: An Administratively Simple Rollover Treatment for Capital Gains Taxation

2020 ◽  
Vol 12 (12) ◽  
pp. 1
Author(s):  
Raymond L. Richman ◽  
Jesse T. Richman ◽  
Howard B. Richman
Keyword(s):  
Capital Gains ◽  
Double Taxation ◽  
Additional Item ◽  
Future Income ◽  
Definition Of ◽  
Lock In

This paper presents a definition of income that rejects both the BEA and Haig-Simons definitions concerning capital gains. Specifically, capital gains represent future income unless brought to the present by consumption of the gain. We demonstrate that the rollover treatment implied by this definition ends double-taxation, under-taxation, lock-in of capital, excessive incentives to consume capital, and other economic distortions. Finally, we detail an administratively-simple deferred gain account rule for the rollover treatment which would require that taxpayers only track one additional item of information – the total deferred gain that would be rolled over into the next tax year.

The Capital Gains Lock-In Effect and Earnings Quality

2019 ◽  
Author(s):  
Stephen G. Dimmock ◽  
Fan Feng ◽  
Huai Zhang
Keyword(s):  
Earnings Quality ◽  
Capital Gains ◽  
Lock In Effect ◽  
Lock In

Germany's Repeal of the Corporate Capital Gains Tax: The Equity Market Response

2004 ◽  
Vol 26 (s-1) ◽  
pp. 73-97 ◽  
Author(s):  
Courtney H. Edwards ◽  
Mark H. Lang ◽  
Edward L. Maydew ◽  
Douglas A. Shackelford
Keyword(s):  
Abnormal Returns ◽  
Economic Effects ◽  
Capital Gains ◽  
Capital Gains Tax ◽  
Cross Sectional ◽  
Price Response ◽  
Corporate Capital ◽  
Market Values ◽  
Lock In Effect ◽  
Lock In

In late 1999, the German government made a surprise announcement that it would repeal the large and long-standing capital gains tax on sales of corporate crossholdings effective in 2002. The repeal has been hailed as a revolutionary step toward breaking up the extensive web of crossholdings among German companies. The lock-in effect from the large corporate capital gains tax was said to act as a barrier to efficient acquisition and divestiture of German firms and divisions. Many observers predicted that once the lock-in effect was removed, Germany would experience a flurry of acquisition and divestiture activity. Several other industrialized countries were poised to follow suit, with similar proposals pending in France, Japan, and the United Kingdom. This paper provides evidence of the economic impact of the repeal by examining its effect on the market values of German firms. While event studies of tax legislation can be difficult, our study is aided by the fact that the repeal was both a surprise and was announced separately from other tax reform proposals. In addition, we provide cross-sectional evidence on the economic magnitude of the repeal, assess the likely beneficiaries from the repeal, and predict which sectors are most likely to experience a surge in acquisition and divestiture activity following the repeal. Our results suggest that the economic effects are highly concentrated. We find a positive association between firms' event period abnormal returns and the extent of their crossholdings, consistent with taxes acting as a barrier to efficient allocation of ownership. However, the reaction is limited to the six largest banks and insurers and their extensive minority holdings in industrial firms. These six large firms have a combined market capitalization equal to 22 percent of all 394 firms in this study. We also find evidence of a positive stock price response to the announcement for industrial companies held by these financial firms, consistent with shareholders in those firms benefiting from the likely reduction in investor-level tax burdens and expected increased efficiency following the tax law change.

Accrual capital gains taxation and the lock-in effect

1983 ◽  
Vol 2 (4) ◽  
pp. 181-185 ◽  
Author(s):  
Steven A. Lippman ◽  
John J. McCall
Keyword(s):  
Capital Gains ◽  
Lock In Effect ◽  
Lock In

scholarly journals Introducing Important Changes Concerning the Avoidance of Double Taxation Between Czech Republic and Poland

2014 ◽  
Vol 14 (2) ◽  
pp. 83-92
Author(s):  
Adam Świerczek
Keyword(s):  
Czech Republic ◽  
Interest Rates ◽  
Tax Evasion ◽  
Income Tax ◽  
Potential Importance ◽  
Double Taxation ◽  
The Czech Republic ◽  
Permanent Establishment ◽  
The Republic ◽  
Definition Of

Abstract On January 1, 2013 a new treaty between the Czech Republic and the Republic of Poland dealing with avoidance of double taxation as well as prevention of tax evasion in the field of income tax has come into effect. The treaty newly introduced the taxation of income of the permanent establishment, changes in rates of dividend taxes, interest rates and royalties, and, last but not least, what has been altered is even the definition of royalties. Furthermore, the treaty also brings a new adaptation of the profits of associated enterprises. Approval of the clause regarding exchange of information as well as cancellation of the tax-sparing clause is a novelty. This article is dealing with the description of the changes and novelties and the indication of the potential importance.

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