TaxLawLecture1

TaxLawLecture1 - Introduction to Tax Law and Policy:...

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1 Introduction to Tax Law and Policy: Outline Income Tax and the Concept of Income Haig-Simons Definition; Tax Base; Tax Enforcement; Fringe Benefits; Illegal Income; Imputed Income Glenshaw Glass Capital Gains and the Realization Doctrine Eisner v. Macomber Tax Avoidance and Tax Shelters Knetsch
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2 The Income Tax: History In the 19 th century, the main source of revenue for the US Federal government was from tariffs on imports Exception: income tax during the Civil War How efficient do you think tariffs were? 1894: Congress enacted an income tax (2% on income > $4000)
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3 The Income Tax: History 1895: Supreme Court struck down the income tax Violated the constitutional requirement that “direct” taxes be apportioned among the states in proportion to their population 1913: Sixteenth Amendment adopted: “The Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States . . .
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4 The Income Tax: History 1913: Congress enacts an income tax similar to that of 1894 1% on income over $3000 for individuals, or $4000 for married couples, plus “surtax” WWI: rates increased to a maximum of 77%; but, reduced after the war WWII: income tax expanded to cover most households (“mass tax”)
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The Concept of Income What is the notion of “income” that the income tax taxes? Net income (accounting concept):
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This note was uploaded on 04/08/2008 for the course ECON 253 taught by Professor Damika during the Spring '08 term at UConn.

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TaxLawLecture1 - Introduction to Tax Law and Policy:...

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