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2 edition of Horizontal equity and taxpayer characteristics of the unfairly treated by the tax system found in the catalog.

Horizontal equity and taxpayer characteristics of the unfairly treated by the tax system

by Jane H. Leuthold

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Published by College of Commerce and Business Administration, University of Illinois at Urbana-Champaign in [Urbana, Ill.] .
Written in English


Edition Notes

Includes bibliographical references (p. 19).

StatementJane H. Leuthold, Ralph D. Husby
SeriesBEBR faculty working paper -- no. 1032, BEBR faculty working paper -- no. 1032.
ContributionsHusby, Ralph D., University of Illinois at Urbana-Champaign. College of Commerce and Business Administration
The Physical Object
Pagination19 p. ;
Number of Pages19
ID Numbers
Open LibraryOL25105323M
OCLC/WorldCa756937093

tax policy, horizontal equity is achieved internally within that group. As an example, if the law allows a deduction for charitable contributions, the group making such contributions is the favored group, receiving specialized treatment compared to other taxpayers. However, horizontal equity is applied. On the other hand, when these initial positions are compared to the two proposals viz. a viz. horizontal equity, the McCain proposed tax system is more horizontally equitable than tax law.

behaviour. Specifically, taxpayers may be less inclined to cheat if they view the tax system as fair and are satisfied with the public services they receive. In contrast, if they feel that they are unfairly treated, they may perceive some tax evasion is justified (Bordignon, ; Barth, Cappelen and Ognedal, ). The concept of replacing the current U.S. income tax system with a flat rate consumption tax is receiving congressional attention. The term “flat tax” is often associated with a proposal formulated by Robert E. Hall and Alvin Rabushka (H-R), two senior fellows at the Hoover th Institution. In the Congress, Representative Michael Burgess’s proposal (H.R. ) would allow taxpayers to.

The amount subject to the IRC 59(e) election will not be treated as a tax preference item in determining the taxpayer's Alternative Minimum Tax (AMT). The amount that a taxpayer elects to amortize for a particular taxable year is generally irrevocable. Examiners should review Treas. Reg. for the rules regarding the election.   The federal Tax Cuts and Jobs Act (TCJA) enacted last year temporarily capped deductions for state and local tax (SALT) payments at $10, per year. The cap, which expires at the end of , disproportionately impacts taxpayers in higher-income states and in states and localities more reliant on income or property taxes, as opposed to sales taxes.


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Horizontal equity and taxpayer characteristics of the unfairly treated by the tax system by Jane H. Leuthold Download PDF EPUB FB2

BibTeX @MISC{Leuthoid84horizontalequity, author = {Jane H. Leuthoid and Ralph D and Jane H. Leuthold}, title = {Horizontal Equity and Taxpayer Characteristics of Those Unfairly Treated by the Tax System}, year = {}}. Horizontal Equity and Taxpayer Characteristics of Those Unfairly Treated by the Tax System.

By Jane H. Leuthoid, Ralph D and Jane H. Leuthold. Abstract. Previous studies have suggested that the tax system does not seriously alter the ranking of utilities of taxpaying families. In this paper, that question is investigated further.

Horizontal equity and taxpayer characteristics of the unfairly treated by the tax system. By Jane H. Leuthold and Ralph D. Husby. Get PDF (1 MB) Abstract. Includes bibliographical references (p. 19) Publisher: Urbana, Ill.: Bureau of Economic and Business Research. College of Commerce and Business Administration, University of Illinois at Author: Jane H.

Leuthold and Ralph D. Husby. Horizontal equity holds that taxpayers who have the same income should pay the same amount in taxes. The principle of horizontal equity is a basic yardstick used to gauge whether tax burdens are fairly distributed. This entry explores how horizontal equity interacts with consumption versus income taxation and implicit taxes.

It also mentions cases in which horizontal equity does not apply. tion of taxpayers without regard to the tax system, and the taxpayers’ ef- fective tax rates), rather than a single variable problem (the distribution of before- or after-tax income). Generally, our framework permits the distinction between measures of income inequality, and vertical and horizontal equity.

The new notion of horizontal equity Cited by: Using the concepts of horizontal equity and system-inherent equivalence scales, we find evidence for a privileged treatment of families with children and a low market income due to the earned income tax credit (EIC), the child tax credit and the supplemental nutrition assistance program (SNAP).

Equity is also an important consideration within a tax policy framework. Equity has two main elements; horizontal equity and vertical equity. Horizontal equity suggests that taxpayers in similar circumstances should bear a similar tax burden. Vertical equity is a normative concept, whose definition can differ from one user to another.

Taxation - Taxation - Principles of taxation: The 18th-century economist and philosopher Adam Smith attempted to systematize the rules that should govern a rational system of taxation.

In The Wealth of Nations (Book V, chapter 2) he set down four general canons: Although they need to be reinterpreted from time to time, these principles retain remarkable relevance. Taxation, imposition of compulsory levies on individuals or entities by governments.

Taxes are levied in almost every country of the world, primarily to raise revenue for government expenditures, although they serve other purposes as well.

Learn more about taxation in this article. Horizontal equity in taxation refers to the idea that people. Which tax system requires higher-income taxpayers to pay a higher percentage of their income in taxes.

in unequal conditions should be treated differently. A transfer payment is a government payment. The tax system should be broad based.

This canon requires that the tax system should not rely on a few taxes. There should be a large number and variety of taxes, so that it can touch all sections of the people in the society.

Neutrality: The tax system should not distort the working of. The fact that the tax system treats taxpayers similarly does not, of course, mean that they are similarly situated. 9 Every tax respects horizontal equity in terms of its own base: a tax based on shoe size imposes an equal burden on all taxpayers who wear the same size shoe.

For horizontal equity to. in unequal conditions should be treated differently. Horizontal equity in taxation refers to the idea that people. in equal conditions should pay equal taxes. Which tax system requires all taxpayers to pay the same percentage of their income in taxes.

a proportional tax. Horizontal equity is treating everyone in the same situation the same. e.g. everyone earning £15, should pay the same tax rates. Efficiency may lead to less equity. The poll tax. The Community Charge (Poll tax) was a tax on every individual. Each individual paid the same amount – regardless of their income.

The fundamental purpose of taxation is to raise the revenue necessary to fund public services. While there are many ways to achieve this goal, a widely agreed-upon set of principles should be used to evaluate tax systems.

This policy brief provides a basic overview of five commonly cited principles of sound tax policy: equity, adequacy, simplicity, exportability, and neutrality. A tax system that is easy to administer reduces the likelihood of errors and facilitates fairness.

Professional and uniform tax administration-both throughout the state and within individual jurisdictions-enhances the effectiveness of the system by improving taxpayer compliance. Poor tax administration will mean that tax burdens are distributed.

Equity or Economic equality is the concept or idea of fairness in economics, particularly in regard to taxation or welfare economics. More specifically, it may refer to equal life chances regardless of identity, to provide all citizens with a basic and equal minimum of income, goods, and services or to increase funds and commitment for redistribution.

Fairnessor equity, thesis writers for hire that everybody should pay a fair share of taxes. There are two important concepts of equity: horizontal equity and vertical equity. Free Taxes Essays and Papers.

While no system of taxes is perfect, it is important to seek horizontal equity because taxpayers must believe they are treated equally. Horizontal equity on the other hand, is more in line with Utilitarian principles, and it holds that economically situated taxpayers occupying similar positions should pay equal taxes, thus a balance of social and economic interest.[7] Therefore, the principle of tax equity can be said to be proportional in nature, whether vertical or horizontal.

40 The Flat Tax tiple-rate system that discriminates among different clas-ses of taxpayers. fairness and economists When economists make judgments about fairness, they most often invoke the concept of equity. As it applies to taxation, and tax burdens in particular, equity has his-torically meant equal treatment of equals.

This usage. The most efficient tax system possible is one that few low-income people would want. That superefficient tax is a head tax, by which all individuals are taxed the same amount, regardless of income or any other individual characteristics.

A head tax would not reduce the incentive to work, save, or invest.HORIZONTAL EQUITY -- Doctrine which holds that similarly situated taxpayers should receive similar tax treatment, e.g.

taxpayers who earn the same amount of income or capital should be accorded equal treatment. HOUSE WAYS AND MEANS COMMITTEE -- The committee of the US House of Representatives that introduces most tax provisions.3.

Equity: Taxation involves compulsion. Therefore, it is important for the tax system to be fair. On grounds of equity it has been suggested that a tax system should be based on a principle of equal sacrifice or ability to pay.

The latter is determined by (a) income or .