What policy reforms could simplify the tax code? Q.What policy reforms could simplify the tax code? A.Reducing the number of distinctions among economic activities and taxpayers’ personal characteristics would simplify the code, reducing both compliance costs for taxpayers and administrative costs for the government. The consequent broadening of the tax base would allow lower tax rates while maintaining revenue and also reduce economic distortions caused by taxation. Read more about What policy reforms could simplify the tax code?
What is the personal exemption? Q.What is the personal exemption? A.Personal exemptions for both taxpayers and dependents provide that only a person’s income above some defined basic level is subject to tax. This helps ensure that the poorest households are not subject to the income tax. In 2017, the personal exemption is $4,050. Read more about What is the personal exemption?
What is carried interest, and how should it be taxed? Q.What is carried interest, and should it be taxed as capital gain? A. Carried interest, income flowing to the general partner of a private investment fund, is generally treated as capital gains for the purposes of taxation. This tax preference is viewed as an unfair, market-distorting loophole by some but consistent with the tax treatment of other entrepreneurial income by others. Read more about What is carried interest, and how should it be taxed?
