Department of Finance
Journal of Actuarial Practice (1993–2006)
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Date of this Version
1994
Document Type
Article
Citation
Journal of Actuarial Practice 2 (1994), 293-297
Abstract
In the paper entitled "Tax Assistance to Qualified Retirement Savings Plans: Deferral or Waiver," Robert L. Brown concludes that "the nontaxation of investment income on qualified funds until taken is a tax waiver or tax subsidy from the government to participants of qualified plans". I believe, however, that this conclusion is based on flawed assumptions pertaining to:
• The behavioral responses of taxpayers to the withdrawal of such tax assistance;
• The definition of an appropriate benchmark tax system against which to measure the cost of such tax assistance; and
• The appropriate basis of comparison of alternative government tax revenue streams.
Using alternative and reasonable assumptions, I conclude instead that the nontaxation of investment income on qualified plans until taken provides gains to government and taxpayers alike.
Included in
Accounting Commons, Business Administration, Management, and Operations Commons, Corporate Finance Commons, Finance and Financial Management Commons, Insurance Commons, Management Sciences and Quantitative Methods Commons
Comments
Copyright 1994 Absalom Press