Corporate tax shelters--transactions that purport to offer large tax savings through little more than paperwork--are perennially in the news. Government efforts to combat them, whether through litigation, new regulations, or proposed legislation, emphasize requiring "economic substance," such as the acceptance of significant economic risks. This approach is odd, since normally there would be no reason for the government to care what risks a company accepts or shuns. In this seminar in AEI’s tax policy series, Daniel Shaviro will deliver a paper discussing the advantages and disadvantages of the economic substance approach.