Financial Analysis for Tax Planning and Policy

• Semester: Spring 2024
• Course ID: 396W
• Credit Hours: 3
• Unique: 28739

Description

The tools of net present value, internal rate of return. implicit tax and expected value, using Excel and high- school algebra, yield important insights for tax planning and tax policy. They are important parts of a client’s concerns and lawyer’s skills but often not taught to nor thought about by lawyers. The insights are often critical of current standard tax planning by important actors and critical of current tax policy. Professor Johnson’ s scholarship has striven for a fair and efficient tax base without loopholes and that will show up in the course.

This course will use excel to compute, e.g., whether you would want to form a new business as a corporation or as an entity that does not pay corporate tax, whether an executive will want to use deferred compensation or current compensation, whether an executive will want to pay tax on stock options early to transform later gains into capital gains. The course will look at swaps and some derivatives.

In tax policy, the analysis implies that adjusted basis (the nondeductible part of an investment) should always be fair market value, that is net present of future cash flows to be consistent with our tax treatment of debt.

The course will teach excel financial analysis functions from scratch if you need it.

There will be a 3- 5 page paper using algebra and/or excel, extending or challenging a discussion in class, or some other tax issue we do not cover. There will be an exam conducted in the computer lab with access to excel for the full exam.

Federal income tax is not a prerequisite, but might be helpful. Algebra, at least through high school level, is a prerequisite and critical almost every day.