Indexation: Is It Equitable?
Article Abstract:
Equitability in tax laws can be assessed vertically between tax brackets and horizontally at the same income level. Adam Smith set four maxims for equitable tax including tax in proportion to revenue, tax should be certain, tax should be paid in a convenient manner and no more than necessary should be held by the government. With indexation according to the Consumer Price Index, the Economic Recovery Tax Act of 1981 (ERTA) solves equitability on a vertical level - bracket-creep has been removed. However, horizontal equity is not assured as there is no capital asset indexation for capital gains taxation. Individuals who benefit from capital gains are taxed on the basis of original cost at a flat rate. The rate of inflation and number of years held are not accounted for. Step-up in basis can benfit higher income individuals who can afford to leave assets in their estates. But lower income individuals are taxed as they need to sell. Tax laws should be analyzed for equitability prior to enactment, particularly for horizontal equity as it is easier to judge. Equitability is required for high levels of compliance.
Publication Name: The Woman CPA
Subject: Women's issues/gender studies
ISSN: 0043-7271
Year: 1984
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Taxpayer record retention requirements
Article Abstract:
The Internal Revenue Service (IRS) does not specify the kind of document of the period for retention in tax laws. Guidelines for the retention of records in a manual system are outlined on the basis of cPA experiences and conformity with IRS requirements. The IRS has, however, issued guidelines for the retention of records in automated data processing (ADP) systems, as well as microfilm and microfiche records. The ADP files and supporting hard copy documents must be retained and be accessible as long as the contexts are necessary in the administration of tax law. Microfilm and microfiche records must be identified, processed, stored, and preserved in an efficient manner for retrieval in the administration of tax law.
Publication Name: The Woman CPA
Subject: Women's issues/gender studies
ISSN: 0043-7271
Year: 1988
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1997 Taxpayer Relief Act changes IRAs
Article Abstract:
People are encourage to study new options as the 1997 Taxpayer Relief Act affected IRA investing. Among the new options is putting income-generating investments in retirement accounts and deferring taxes for 10 years or less to raise eventual return. People can also hold capital assets for longer than 18 months which will be taxed for a maximum rate of 20% while gains on assets held for 12 to 18 months will be taxed at 28% the most.
Publication Name: Women in Business
Subject: Women's issues/gender studies
ISSN: 0043-7441
Year: 1997
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