Backdating, tax evasion, and the unintended consequences of Canadian tax reform
AbstractIn 1984 and 2000, significant changes were made to the tax treatment of employee stock options in Canada. Although designed to increase the use of stock options as a compensation vehicle (1984) and decease the loss of knowledge workers (2000), we argue that these tax changes were largely ineffective and perhaps unneeded. Further we demonstrate the negative unintended consequences of these actions, specifically that they reward the backdating of employee stock options and promote tax evasion, and discuss the policy implications of these unintended consequences.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 39788.
Date of creation: 2010
Date of revision:
Publication status: Published in Tax Notes International 9.59(2010): pp. 671
Employee compensation; stock options; personal income tax;
Find related papers by JEL classification:
- K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
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