Post by Sapphire Capital on Aug 1, 2008 3:22:51 GMT 4
Mergers, Taxes, and Historical Materialism
Ajay K. Mehrotra
Indiana University School of Law-Bloomington
Indiana Law Journal, Vol. 83, p. 881, 2008
Abstract:
In the last few years, corporate mergers and acquisitions witnessed explosive growth. Although more recent market conditions have halted the latest merger movement, scholars and commentators have used the earlier rise in merger activity to reevaluate the preferential tax treatment granted to those mergers and acquisitions that fall under the U.S. tax law's definition of a corporate "reorganization." Under the current Internal Revenue Code, neither shareholders nor corporations recognize gain or loss on the exchange of stock or securities in transactions that qualify as a "corporate reorganization." The significance of this tax rule raises a central question: why does this tax preference exist? Since its statutory inception in 1919, numerous scholars have debated the theoretical justifications for this tax law. Few, however, have sought to move beyond intellectual and conceptual origins to address the more pertinent question of institutional development: how and why has this tax benefit become a deeply entrenched part of American corporate tax law?
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1157411_code249135.pdf?abstractid=1157411&mirid=3
Ajay K. Mehrotra
Indiana University School of Law-Bloomington
Indiana Law Journal, Vol. 83, p. 881, 2008
Abstract:
In the last few years, corporate mergers and acquisitions witnessed explosive growth. Although more recent market conditions have halted the latest merger movement, scholars and commentators have used the earlier rise in merger activity to reevaluate the preferential tax treatment granted to those mergers and acquisitions that fall under the U.S. tax law's definition of a corporate "reorganization." Under the current Internal Revenue Code, neither shareholders nor corporations recognize gain or loss on the exchange of stock or securities in transactions that qualify as a "corporate reorganization." The significance of this tax rule raises a central question: why does this tax preference exist? Since its statutory inception in 1919, numerous scholars have debated the theoretical justifications for this tax law. Few, however, have sought to move beyond intellectual and conceptual origins to address the more pertinent question of institutional development: how and why has this tax benefit become a deeply entrenched part of American corporate tax law?
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1157411_code249135.pdf?abstractid=1157411&mirid=3