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The Historical Origins of the Debt-Equality Distinction

Camden Hutchinson


This Article uses historical evidence to trace the debtequity distinction’s origins, development, and continuing evolution. Citing legislative history, business lobbying efforts, and important changes in the broader historical context, this Article argues that the disparate treatment of debt and equity was never a conscious policy goal, but was rather the unintended outcome of an extended series of short-term political decisions. These political decisions were historically specific—i.e., formulated in response to temporary historical contingencies—but had consequences that have persisted to the present day. The Article concludes by assessing the broader implications of this history for both the current structure of the U.S. tax system and the prospects of future tax reform.

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Published by the University of Florida Press on behalf of the University of Florida Levin College of Law.