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Backdating, tax evasion, and the unintended consequences of Canadian tax reform

Ryan Compton, Daniel Sandler and Lindsay Tedds ()

MPRA Paper from University Library of Munich, Germany

Abstract: In 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.

Keywords: Employee compensation; stock options; personal income tax (search for similar items in EconPapers)
JEL-codes: H26 J33 K34 K42 (search for similar items in EconPapers)
Date: 2010
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Published in Tax Notes International 9.59(2010): pp. 671

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