Class Notes 040208 Tax Reform

Class Notes 040208 Tax Reform - Tax Reform 1 Current law v...

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4/2/08 Tax Reform 1.  Current law v. 2011 2. Aggregate and distributional analysis of fundamental (Flat Tax) tax reform 3. President’s Commission Reccomendations Current Law v. 2011 1. 2001/2003 Tax Laws lowered tax rates, created new lower tax rate on capital gains. 2. In 2011, rates will revert back to where they were in 2000. 3. Law also dramatically changed estate tax for the 0.5% of people who pay it. a. Most of the discussion about taxes the next couple years will be about 2000  law/rates vs. what we have now. Fundamental Tax Reform What tax rate would be needed if 1) we taxed all of AGI and 2) we applied a single rate o A: 12.6% Problem is that all but two highest groups face tax increases (90% of  taxpayers) Aggregate Analysis     —what tax rate did we need for new system (same amount as above) Distributional analysis     —how are different income groups affected? Flat Tax
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This note was uploaded on 04/28/2008 for the course ECON 401 taught by Professor Sabelhaus during the Spring '08 term at Maryland.

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Class Notes 040208 Tax Reform - Tax Reform 1 Current law v...

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