Chapter_17 个人所得税.pptVIP

CHAPTER 17 THE PERSONAL INCOME TAX Computation of Federal Personal Income Tax Liability Haig-Simons Income (Comprehensive Income) Income = Consumption + DNet Worth Maximum consumption taxpayers can enjoy without spending down their wealth Anything received that can be used, either now or later, to purchase goods and services Subtract costs of earning income Items Included in H-S Income Employer pension contributions and insurance purchase Transfer payments, including Social Security benefits, unemployment compensation, and welfare Capital gains Realized versus unrealized Income in kind Imputed rent Some Practical and Conceptual Problems Computing income net of business expenses Computing capital gains and losses Computing imputed income from durables Valuing in-kind services Evaluating the H-S Criterion Equity – treats likes alike Efficiency – treats all forms of income the same; decisions made on the basis of economic value not tax consequences Excludable Forms of Money Income Interest on State Local Bonds Some dividends Capital gains Employer contributions to benefit plans Some types of saving Individual retirement account (IRA) Roth IRA 401(k) plan Keogh plan Education savings account Gifts and Inheritances Personal Exemptions Allowable Exemptions Taxpayer and spouse Children under 19 (or 24 if in school) Children and other relatives who pass certain tests (depend on taxpayer for support) Phase out Why are there exemptions? Adjust ability to pay for presence of children Provide tax relief for low-income families Deductions Standard versus Itemized Deductibility and Relative Prices PZ ? (1-t)PZ Important Itemized Deductions Unreimbursed medical expenses 7.5% AGI State and Local Income and Property Taxes Certain Interest Expenses Interest on consumer debt Interest on qualified education loans Interest on debt incurred to purchase financial assets Interest on home mortgages Interest rules in terms of H-S criterion Tax Arbitrage Charitable Contributions More