Stephen T. Limberg

Fairness in markets: A laboratory investigation

Abstract It is generally assumed in applications of economic theory that people are concerned only with their monetary wealth. However, bargaining and public choice research indicates that people respond not only to monetary incentives, but also to considerations of fairness. The purpose of this study is to consider the effect of fairness on market behavior. This issue was addressed in a series of eight laboratory markets. The results suggest that fairness can affect market prices, but that the effect may decline over time.

Using pictorial models to teach complex tax rules: An experimental investigation

Abstract This study investigates the benefits of using pictorial models to teach complex tax rules. A pictorial model is a simplified visual representation of the major concepts and relations of a complex rule. Prior research suggests that a pictorial model will improve a students ability to apply a tax rule by affecting the type of mental models available for problem solving. This hypothesis was tested in an experiment in which 135 introductory tax students received instruction in two complex tax rules, and then took a problem-solving test. Some students received only a narrative description of the rule (text-only instruction), whereas other students received a narrative description supplemented by a pictorial model (text-plus-model instruction). The text-plus-model students outperformed the text-only students in solving problems like those covered during instruction, but not in solving novel problems. This finding, in conjunction with supplementary data, suggests that the benefits of pictorial models may be more fully realized by informing students how to best integrate visual and narrative instructional materials.

International transfer pricing restrictions: impact on corporate financial policy

Transfer pricing is a pervasive issue that presents significant tax savings potential concerning international enterprises. The authors discuss company incentives to manage transfer prices in an artic/e appearing in the preceding issue of this journal. In response to these incentives, governments have increasingly enacted and enforced domestic restrictions on transfer prices. In this article, contemporary norms restricting transfer pricing are analyzed. The OEGD and US pricing standards are assessed and Brazils recent application of these standards is considered. Transfer pricing methods are described and evidence of their use is presented. We conclude by describing an intercompany transfer pricing policy intended to facilitate internaI financiaI management and minimize externaI tax threats.

lnternational transfer pricing strategies for minimizing global income taxes

A sobrevivencia a longo prazo de estrategias financeiras otimas, em mercados internacionais competitivos, e critica. Estrategias financeiras concernentes a precos de transferencia se tornam cada vez mais importantes a medida que os fiscais de impostos de rendas procuram receitas adicionais atraves de um controle crescente das praticas empresariais. Neste artigo, as estrategias otimas de impostos sao apresentadas depois de serem revisados o conceito de precos de transferencia e as suas bases logicas subjacentes ao crescente interesse dos governos. Num proximo artigo, nos analisaremos os efeitos das restricoes governamentais nas estrategias de precos otimos.

Financial strategies for minimizing corporate income taxes under Brazil's new global tax system

In 1996, Brazil adopted a worldwide income tax system for corporations. This system represents a fundamental change in how the Brazilian government treats multinational transactions and the tax minimizing strategies relevant to businesses. In this enicte, we describe the conceptual basis for worldwide tax systems and the problem of double taxation that they create. Responses to double taxation by both the governments and the priva te sector are considered. Namely, the imperfect mechanisms developed by Brazil and other countries for mitigating double taxation are analyzed. We ultimately focus on the strategies that companies utilize in order not only to avoid double texetion, but also to take advantage of tax havens.

Tax issues in petroleum-industry reorganization

Previous reorganizations in the oil industry have been merger waves driven by market power, tax, efficiency, and managerial motives. Current reorganizations have both efficiency and tax consequences. This article develops a model of the tax consequences of reorganizations through an explicit capital market model of valuation and tax effects. This is applied in detail to the royalty trust mode of reorganization. It shows how the value of reorganization is affected by the oil price and tax rates, as well as by firm or property-specific characteristics such as past profits, cost basis, and shareholders tax class and stock basis. When the underlying asset appreciates, as happened with oil and gas in the 1970s and 1980s, the gain to reorganization increases. This analysis shows how the 1984 tax law changes the results. The approach also offers a method of valuing the tax effects of other potential industry reorganizations. 26 references, 2 figures, 1 table.

DETERMINING THE ESSENTIAL ELEMENTS OF OCCUPATIONAL COURSES

Administrators, instructors, students, and employers need to know the essential concepts taught in occupational courses. In particular, instructors require this information in order to avoid some common teaching traps and to avoid establishing a series of cumulative deficiencies for their students. To provide this information, community college accounting instructors performed a forced Q‐sort of 56 accounting concepts. The high level of agreement on the Q‐sort was evidence for a “community of preference.” Lists of the essential and least important concepts were developed from this community of preference. The Q‐sort appears to be an efficient and effective “method” for determining what emphasis instructors should place on course content items.