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Tax shelters have proliferates in the United States not only because of financial innovation, the globalization of capital markets, the increasing complexity of our tax system, the inadequacy of tax penalties, the lack of political support for tax reform, and the growing popularity of textualist interpretation – all factors that have attracted considerable attention in the literature. Shelters also derive from a structural imbalance in our tax system that has not been adequately explored: In important respects, the private tax bar outmatches its counterpart in government. This imbalance is one of sheer numbers, of access to information, and, at least in some cases, of sophistication and expertise. The problem is evident not only in the low audit rate, a familiar issue, but also in the way the government staffs drafting projects and litigation. Unfortunately, this mismatch helps breed the familiar equity and efficiency concerns associated with aggressive planning.


Law | Tax Law

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