Abstract
Tax shelters take advantage of unintentional gaps in the tax base often caused by subtle mismatches in complex tax rules. The optimal line between allowable tax planning and illegitimate tax shelters depends on the cost of closing these gaps compared with the revenue raised, relative to the efficiency costs of other sources of funds. The definition of illegitimate tax shelters, therefore, depends on parameters such as the tax base and rate structure as well as the expected taxpayer response to different possible definitions.
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Weisbach, D.A. (2018). Tax Shelters. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2561
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DOI: https://doi.org/10.1057/978-1-349-95189-5_2561
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