Personalized Pensions - The Vested Interest
The Committee set up by Norman Fowler is considering the type of portable pensions. The Centre for Policy Studies envisaged the replacement of existing company pension schemes by arrangements under which each employee would have a specific amount allocated each year to build up his own personal and portable pension fund. Different sections of the community view it with vested interests. Politicians get more votes in the short run and in the long run they can direct investments into desirable projects. The Press considers it inadequate as in many cases it leads to ex-gration payments. The interest of the Life Officer depends on whether they have a well established pensions business. Pension scheme members consider it more efficient to leave it to their employers. Finance Directors favor it because they have the expertise to make rational investment decisions. The vested interest in the pension industry is shared and affects politicians, journalists, finance directors, shareholders and the public.
Publication Name: The Accountant
Non-vested options not income at grant - Reg. valid
The Tax Court ruled in the 'Cramer' case that a taxpayer's options did not have a readily determinable fair market value (FMV) under Reg. 1.83-7(b) because they were not vested and immediately exercisable at the time of their sale. The options were therefore not considered a compensatory event under Section 83(e). Consequently, the taxpayer recognized ordinary income upon the sale or exercise of the option. Reg. 1.83-7(b) holds that seldom traded options do not have readily ascertainable FMV unless they are transferable by the optionee, can be immediately exercised in full by said optionee, and are not subject to any restrictions or conditions that have a substantial impact on the option's FMV. The FMV of the option privilege was also be easily determinable. The Ninth Circuit upheld the Tax Court's decision.
Publication Name: Taxation for Accountants
Interest rates, income taxes and anticipated inflation: some new evidence
A re-examination of Peek's assertion that despite the rejection of the no-tax Fisher hypothesis displayed significant tax effects is presented. Using a different time frame that includes the 1980s and a new set of inflation expectations as test factors, results show that Peek's view that inclduding tax effects in determining interest rates is rejected for the period of 1968 to 1979. For the full sample, tax-adjusted and non-tax adjusted hypotheses are accepted. These findings are significantly different from those of Peek.
Publication Name: Journal of Banking & Finance
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