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Tax Breaks in the Tax Code

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shmokes:

--- Quote from: Samstag on September 16, 2012, 05:29:52 pm ---
--- Quote from: shmokes on September 16, 2012, 02:53:46 pm ---I think the reason they're not more common is that the process of auditing leads to the loopholes being plugged usually within a few years. Clever corporations and individuals exploit ambiguity in the text, but when they get called on it in an audit, the IRS rolls their eyes and the ambiguity is soon clarified in an amendment to the Code.

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Can you name an example of that ever happening?

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It's happened a ton of times. But off the top of my head, the loophole to get around the "marriage penalty" by obtaining a divorce in a foreign country in December and remarrying in the U.S. in January was plugged a few years after it began to be exploited. If you think about it, of course it happens. There's no way congress could write the entire code without making errors. The errors are found and rooted out over the years. Of course it works like that. And, of course, the Code is expanded in various ways too, which means new errors. And those are then rooted out as well.

kahlid74:
On those lines Check out this article - http://economix.blogs.nytimes.com/2012/09/15/tax-cuts-and-economic-growth/


--- Quote ---    The top income tax rates have changed considerably since the end of World War II. Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the 1970s; today it is 15%. The average tax rate faced by the top 0.01% of taxpayers was above 40% until the mid-1980s; today it is below 25%. Tax rates affecting taxpayers at the top of the income distribution are currently at their lowest levels since the end of the second World War.

    The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie.

    However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. As measured by IRS data, the share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. At the same time, the average tax rate paid by the top 0.1% fell from over 50% in 1945 to about 25% in 2009. Tax policy could have a relation to how the economic pie is sliced—lower top tax rates may be associated with greater income disparities.
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Here's the Congressional Report where they got their summary from - http://graphics8.nytimes.com/news/business/0915taxesandeconomy.pdf

Howard_Casto:
"I like to pay taxes. It is purchasing civilization" — Oliver Wendell Holmes

“Taxes, after all, are dues that we pay for the privileges of membership in an organized society” – Franklin D. Roosevelt

“Rich bachelors should be heavily taxed. It is not fair that some men should be happier than others” — Oscar Wilde

“A tax loophole is something that benefits the other guy. If it benefits you, it is tax reform” — Russell B. Long

“The best measure of a man’s honesty isn’t his income tax return. It’s the zero adjust on his bathroom scale” — Arthur C. Clarke

shmokes:
All the best quotes in the world are Oscar Wilde's

Gray_Area:

--- Quote from: shmokes on September 17, 2012, 09:26:43 pm ---All the best quotes in the world are Oscar Wilde's

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There is (and perhaps was intentional?) irony to that one above. I promote his early enthusiasm in:

Aestheticism (or the Aesthetic Movement) is an art movement supporting the emphasis of aesthetic values more than socio-political themes for literature, fine art, music and other arts.

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