A JUDICIAL PERSPECTIVE ON TAX REFORM

[During the tax reform process which has taken place over the last 25 years, simplicity has invariably given way to equity or efficiency when these objectives have conflicted, resulting in an extremely complex and burdensome system. In this piece, it is argued that the solution to this problem is not to be found in periodic tax reviews; rather, 'architectural' or `structural' reform is required, even if this means that the criteria of equity and efficiency are compromised. At its most ambitious, such reform could entail the assimilation of all capital gains and losses to gains and losses on revenue account. A more modest change would be to remove uncertainty by embarking upon a process whereby the capital/revenue dichotomy was written out of the tax legislation.]