AN ACCRETION CORPORATE-INCOME TAX

In this article, Professor Michael Knell proposes replacing the curren t corporate income tax with an accretion corporate tax, which would ta x the change in the total market value of a corporation's outstanding securities. Such a tax would more closely approximate the income ideal and would be simpler to implement than the present system, which reli es on unsatisfactory accrual accounting conventions. Most important, t he accretion corporate tax would sharply reduce the cost of tax admini stration, the burden of tax compliance, and the incentive to engage in tax planning. Professor Knell also describes how to implement the acc retion corporate tax, addressing such questions as the appropriate tax base, the valuation of nontraded securities, and the adjustments nece ssary to preserve special tax rules.