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Dynamics of the Market for Corporate Tax‐Avoidance Advice *
Author(s) -
Konrad Kai A.
Publication year - 2021
Publication title -
the scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/sjoe.12389
Subject(s) - tax planning , tax avoidance , tax reform , imitation , public economics , corporate tax , tax credit , indirect tax , economics , value added tax , ad valorem tax , business , direct tax , double taxation , tax policy , psychology , social psychology
This paper addresses the debate over aggressive tax‐planning models and analyzes the role of tax consultants. It focuses on the dynamic interaction between innovation and imitation of aggressive tax‐planning products and governmental tax regulation, and it highlights the importance of the length of regulatory lag in comparison with the time it takes the tax‐consulting industry to imitate newly innovated tax‐avoidance products. It reveals an alignment of interests between highly innovative tax‐consulting firms and the governmental tax legislator/regulator. The conclusions are also relevant for the policy debate on mandatory disclosure rules about aggressive tax‐planning models.