The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Tax Shelters

  • David A. Weisbach
Reference work entry


Tax shelters take advantage of unintentional gaps in the tax base often caused by subtle mismatches in complex tax rules. The optimal line between allowable tax planning and illegitimate tax shelters depends on the cost of closing these gaps compared with the revenue raised, relative to the efficiency costs of other sources of funds. The definition of illegitimate tax shelters, therefore, depends on parameters such as the tax base and rate structure as well as the expected taxpayer response to different possible definitions.


Elasticity of taxable income Tax avoidance Tax base Tax compliance Tax evasion Tax rules Tax shelters 

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • David A. Weisbach
    • 1
  1. 1.