The history and development of the choice principle
“The History and Development of the Choice Principle” is split into different categories of Australian and New Zealand cases in relation to the choice principle: dividend stripping, tax loss grouping provisions, inflated deductions, and income splitting. It considers the official position of the Inland Revenue Department on the choice principle, and sets out arguments for and against the advantages of adopting the principle in New Zealand.
Does the Use of General Anti-Avoidance Rules to Combat Tax Avoidance Breach Principles of the Rule of Law?
As part of systems of tax law, general anti-avoidance rules frustrate transactions that contrive to avoid tax. Avoidance transactions adhere to the strict letter of the law while flouting or exploiting its policy. Statutory general anti-avoidance rules are found in many countries in Europe and in the British Commonwealth, apart from the United Kingdom itself, but judge-made substance-over-form rules in the United States and the United Kingdom sometimes have a similar effect. Much of the force of these rules comes from their imprecision, imprecision that, arguably, breaches the principles of the rule of law. The authors take a comparative approach that examines statutory general-anti-avoidance rules from a number of jurisdictions. They compare these rules with the principles of the rule of law as those principles are currently understood and they compare the typical form of a general anti avoidance rule with the forms of several rules of criminal law that notoriously breach the rule of law. They thus compare the operation of general anti-avoidance rules with (a) the requirements of the doctrine of the rule of law as adumbrated by Dicey, Rawls, Hayek, Raz, and, notably, Fuller and (b) with the general offence rules of the Nazi criminal code of the Free City of Danzig, with Article 386 of the Criminal Code of the Qing Dynasty of China, and with the crime of corruption of public morals, an offence in effect created by the United Kingdom House of Lords in 1962 in Shaw v Director of Public Prosecutions. Concluding that a general anti-avoidance rule breaches at least the principle of certainty of law the authors turn to a consideration of whether there is anything in the nature the activity of tax avoidance that might justify such a breach even though, for instance, the law treats serious criminals as entitled to the benefits of the rule of law. The authors advance the hypotheses that the activity of tax avoidance is of a nature that relies for its success on the formality of the law and relies in a sense on the rule of law itself. In effect, it corrupts the rule of law by exploiting it. If tax avoidance is in this manner an attack on the rule of law a legislature may be justified in responding by enacting a general anti-avoidance rule.
Strategy and Manipulation in Medieval Elections
There are many goals in developing electoral protocols, including a desire for a system which is transparent, in that it is clear what the rule or procedure to follow is; nonmanipulable, in that it is not in a person’s best interest to misrepresent their preferences; honest, in the sense that it elects the ‘right’ candidate; and not open to strategizing, i.e., bribery or collusion. However, these desiderata are in tension with each other: Often, transparent electoral procedures are the least strategy resistant, and many honest procedures encourage manipulation. Thus a balance between these different goals must be sought. In modern times, since the seminal result on vote manipulation, the Gibbard-Satterthwaite Theorem [5, 6], much attention has been devoted to developing voting rules where manipulation is never in the best interest of the voters [4] or which are computationally too complex for the average bounded agent to be able to manipulate [1]. This focus on computational aspects of electoral methods is one of the hallmarks of modern studies on voting. But pursuit of these goals is not restricted to modern times: Those participating in elections in the Middle Ages also sought transparency, non-manipulability, honesty, and strategyproofness in so far as these properties can be consistently expressed in a single procedure. However, given the lack of computational sophistication in the Middle Ages, alternate approaches were needed in order to promote honesty, discourage strategizing, etc. These approaches can be classified as either external (constraints introduced outside of the electoral procedure, such as incentives for coming to consensus quickly) or internal (constraints introduced within the electoral procedure, such as voting rules which cannot be manipulated without adverse effects, or which are too difficult for the average bounded agent to manipulate). Surveying examples of both approaches in the context of medieval ecclesiastical and secular elections provides an interesting comparison to modern electoral procedures. Elections in the Middle Ages were used for the same reasons that they are today: To select suitable candidate(s) for a particular office, duty, or obligation. However, it is important to note that the term electio was used in the Middle Ages in a broader sense than our modern ‘election’. Its primary sense was ‘selection’ or ‘choice’, and only secondarily ‘election’ in the modern sense. Thus, many records which purportedly discuss elections are not discussing elections of the type which interests us. We can identify four categories of medieval electoral processes: (1) Election by an external authority having no direct interest in the election; (2) Indirect election, where electors name other electors who then select or elect the officials; (3) Election by lot; and (4) Election by ballot. Elections of the first and third types are generally computationally uninteresting; the first type corresponds to dictatorial voting rules, and the third type collapses to probability theory. In general, interesting voting methods are found only in the fourth type, election by ballot, though they can also occur in indirect election.