Taxes, High-Income Executives, and the Perils of Revenue Estimation in the New Economy
- Topics:
- Taxes
- Tags:
- Finance,
- Stock Market,
- Stock,
- Revenue,
- Operational Accounting,
- Investment,
- Income,
- Free Trade,
- Financial Planning,
- Taxes
FREE Registration is required
Vendor Registration: $ Paid Download
Overview: This paper attempts to help explain the unforecasted, excess' personal income tax revenues of the last several years. Using panel data on executive compensation in the 1990s, it argues that because the gains on most stock options are treated as ordinary income for tax purposes, rising stock market valuations are directly tied to non-capital gains income. This blurred line between capital and wage income for has affected tax revenue in three ways, at least for these high-income people. First, stock performance has directly affected the amount of ordinary income that people report by influencing their stock option exercise decisions. Second, the presence of options gives executives more flexibility in changing the timing of their reported income and appears to make them much more sensitive to the short-run timing of tax changes, even accounting for the stock market changes of the period
(Is this item miscategorized? Does it need more tags? Let us know.)
Format: PDF | Size: 39KB | Date: Mar 2000 | Pages: 13
