Unformatted text preview: Tax-reform efforts Not paying taxes is illegal, but the government offers numerous loopholes that individuals and corporations may use to reduce their tax burden legally. Although the technical details can be quite complicated, the basic idea is simple: The government gives tax breaks to individuals and companies who act in a manner that policymakers want to encourage, such as buying a home, adding equipment in a factory, placing kids in child care, or entertaining clients at restaurants and sporting events. In the early 1980s, these tax deductions were sometimes so generous that large corporations did not pay any income taxes at all, leading some to conclude that the income tax system was not progressive so much as haphazard. Proposals for tax reform include closing loopholes, simplifying tax filing, and changing tax rates. Under the 1986 Tax Reform Act, the number of tax categories was reduced, rates were lowered, and...
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- Spring '08