Leonid A. Levin

Title: Leonid A. Levin

Main Research Question: How can taxes be simplified and made more efficient without causing distortions in the market?

Methodology: The study proposes an innovative tax system called the Equity Tax. This system is designed to replace corporate, dividend, and capital gains taxes. It is applicable to publicly held corporations and works by reflecting the expected true annual return on investments, as perceived by investors, not as defined by law. The system has no loopholes, requires little regulation, and leaves all business decisions tax-neutral.

Results: The Equity Tax enlarges pre-tax profits since this is what taxpayers maximize. The wealth shelter is paid for by efficiency, not by lost tax. The total capital absorbed by the taxed sector is the only thing the tax could possibly distort. The rates should be matched to minimize this distortion.

Implications: The Equity Tax is a simple, efficient, and cost-effective tax system that avoids the problems associated with other tax systems. It reduces compliance costs, eliminates loopholes, and allows businesses to make tax-neutral decisions. This study suggests that the Equity Tax could be a viable alternative to existing tax systems.

Link to Article: https://arxiv.org/abs/0012013v18 Authors: arXiv ID: 0012013v18