Reconsidering the taxation of life insurance proceeds through the lens of current estate planning

Article Abstract:

The income taxation of life insurance proceeds should be changed so that proceeds are taxed in those instances when the policy rationale of providing for family members is not applicable. Life insurance is favored in the income tax laws, and estate taxation is easily avoided through proper planning. The tax preferences given to life insurance should not apply when the beneficiaries will be adequately supported because the decedent was wealthy. Income taxation of life insurance should be revised because revision of transfer taxation laws would create artificial distinctions among types of transfers at death.

Planning, Life insurance, Income tax, Transfer taxes

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Taxation of business rent

Article Abstract:

The current tax treatment of rent respects a level rent in long-term leases although rent on a depreciating asset should be higher when the asset is new. Therefore, current law results in distorted economic behavior and lost revenue. Rent should be taxed in the same way as a loan, using concepts such as present value and compounding. Realization rules similar to the current rules could be included, and any approach to non-economic accelerated depreciation could be accommodated. The proposed loan proxy approach is also applicable to sales for terms of years.

Economic aspects, Rents (Property), Depreciation

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Derivatives design and taxation

Article Abstract:

The IRS revised its tax treatment of contingent payment debt instruments in proposed regulations released in 1994, but more fundamental changes in tax law are needed to allow securities issuers to innovate and improve market efficiency through the use of derivatives. Derivatives provide investors with risk management and arbitrage tools, and tax laws should not chill the use of these instruments. In retaining the debt-equity distinction, the regulations fail to address the economic reality underlying derivative instruments.

Derivatives (Financial instruments), Financial instruments

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