Understanding Asset Allocation: An Intuitive Approach to Maximizing Your Portfolio

Chapter 4. Tax Tips

The corporate story in recent years has been an ugly one. But most black ink dedicated to corporate accounting scandals, questionable capital structures, distorted executive-compensation packages, and rising equity risk premiums has failed to pinpoint an important source of the ugliness: Each undesirable episode was in part influenced by the tax changes that took place over the last two decades. Although the distorting economic effects of the ever-changing tax code impact the way investors, financial managers, and nearly all members of the labor force behave, tax-rate adjustments also help explain shifts in corporate behavior and structure. Identifying and understanding these shifts at the source is critical to developing a ...