week7 - XII. U.S. TAX SYSTEM A. Overview of U.S. sources of...

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XII. U.S. TAX SYSTEM A. Overview of U.S. sources of revenue B. State taxes. C. The personal income tax. 1. Define wages: Haig- Simons definition: income is the money value of the net increase in an individual’s power to consume during a period (e.g., a year). a. Includes amount actually consumed in period. b. Includes savings. 2. Components of HS income include: a. Wages, salaries, profits, rents, royalties, dividends, interest. b. Employer contributions to pensions/other retirement. c. Employer contributions to employee’s insurance – including health insurance. d. Transfer payments, like Social Security. e. In-kind income – including transfer payments and (very important) imputed rent of owner-occupied housing. f. Capital gains – both realized and unrealized. . 3. Potential complications. a. Interested in increase in income net of business expenses – but how distinguish between consumption expenses and cost of business? b. Difficult to measure capital gains (or losses). c. Value of in-kind income may be hard to measure. 4.
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This note was uploaded on 06/30/2009 for the course ECON 103 taught by Professor Sandrablack during the Fall '07 term at UCLA.

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week7 - XII. U.S. TAX SYSTEM A. Overview of U.S. sources of...

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