By the end of today you will be able to…Identify differences between different types of taxesDescribe the current composition of federal tax revenueList the (conflicting) priorities in a typical tax policy agendaConceptualize challenges in tax reformEnumerate key tax planning strategies
A lesson from the past …
Major Types of TaxesIncome TaxesExcise Taxes (gasoline, tobacco, liquor)Employment TaxesEstate & Gift Taxes (transfer of wealth)Property Taxes (ad valorem on real or personal property)Sales Taxes
Tax Revenue StatisticsSource% Total RevenueAvg. Rev. per ReturnOverall Audit ProbabilityTax Revenue ($’s in billions# Returns (#’s in millions)Individual Income Tax50.35%$7,0091.1%$1,006143.6Corporate Income Tax8.76%$25,5281.5%$1756.9Excise and Customs Taxes2.38%$90,9732.4%$47.50.52Estate and Gift Tax0.37%$33,33818.2%$7.3 2.2Employment38.14%$25,9020.2%$762.729.4PartnershipsN/AN/A0.4%N/A3.6Other (mostly Declarations of Estimated Tax)0.0---48.2Totals100.0%$1,998.5234.4Source: Compiled from Internal Revenue Service Data Books for 2010.
Taxing JurisdictionsFederal GovernmentState GovernmentLocal Governments (County and/or City)Foreign GovernmentsThe Baltimore example:Federal Government: 39.6%State of Maryland: 5.75%County of Baltimore: 2.83%City of Baltimore: 3.05%Highest combined bracket 51.23%