Why might Congress and the Treasury avoid drafting tax rules that are very specific? What costs would such rules impose on the Internal Revenue Service? What benefits might they bestow on certain taxpayers?
Answer to relevant QuestionsWhat are the sources and causes of complexity in our tax system? Which, if any, of these causes are correctable? Suppose the taxpayer can time when he is to receive $ 100,000 of income that is fully taxable. Current interest rates are 10% on fully taxable securities and the taxpayer faces a current tax rate of 31%. If the taxpayer ...A taxpayer suffered a $ 20,000 capital loss early this year (from selling some securities) and is considering two alternatives for generating extra income. The first alternative is to find part time employment at the local ...The interest income on bonds issued by tax exempt organizations is often exempt from federal taxation in the United States. In comparing savings vehicles, why is it inappropriate to view these bonds as perfect substitutes ...Assume the same facts presented in exercise 9 with the exception that the taxpayer elects to pay the taxes on the conversion from the IRA funds. Should the taxpayer convert to a Roth IRA?
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