Taxes and Business Strategy: A Planning Approach

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Date: Fall 2001
Publisher: American Accounting Association
Document Type: Book review
Length: 1,186 words

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MYRON S. SCHOLES, MARK A. WOLFSON, MERLE ERICKSON, EDWARD L. MAYDEW, and TERRY SHEVLIN, Taxes and Business Strategy: A Planning Approach, Second Edition (Upper Saddle River, NJ: Prentice Hall, 2002, pp. xxiv, 515, $82.75).

Hooray! The "Scholes-Wolfson" revision is finally here.

In 1995, in this journal, I described the original version of this book as, "a watershed to tax education because it provides a conceptual framework that bridges traditional tax analysis and microeconomics" (Shackelford 1995). With hindsight, my comments were inadequate and understated. The original proved to be a seminal work that overhauled tax research, education, and (some practitioners have told me) practice. Today the "Scholes-Wolfson" paradigm detailed in the original text dominates tax research in accounting and forms the backbone of some of the most popular tax courses in leading M.B.A. and accounting programs.

Over time, however, the book grew dated. Written mostly in the late 1980s, with extensive references to the "recent 1986 tax reform," it became increasingly embarrassing to use in the classroom. While the principles outlined in its framework had a timeless nature (e.g., marginal tax rates still matter), the application chapters, particularly in areas such as mergers and acquisitions, became increasingly irrelevant, if not erroneous. Moreover, the text failed to incorporate the extensive tax research triggered by the original text (Shackelford and Shevlin, forthcoming). Consequently, it became difficult to justify requiring students to buy the book, and I instructed new doctoral students to read it for its analytical approach, not for its factual content. Over time, I (like many others) developed my own teaching materials and relegated the text to optional status for my students.

The obvious solution to this problem was to revise the book, update its more technical chapters, and include a decade of scholarly research. This proved easier...

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Gale Document Number: GALE|A79757286