Unformatted text preview: rates * If current tax rates are lower than the expected future rates, the absolute tax cost can be reduced by recognizing income now rather than later. This reduction in tax cost incurs another cost - the cost of Fnancing the payment of tax in advance. As long as the tax savings is greater than the related Fnancing cost, a wealth enhancement will result for the taxpayer....
View Full Document
- Spring '11
- Economics, Stock and flow, Current tax rates