The History Of Federal Income Tax

The History Of Federal Income Tax

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· The examination consists of 10 questions (with sub questions).

· Seven are worth 10 points each and 1 is worth 30 points.

· In answering the questions, you can utilize course material including the supplemental material provided.

· Please type your name and student exam number/ID as well.

· ++++++++++++++++++++++++++++++++++++++++++++++++++++++

· Question 1

o Please describe and explain the taxes levied by local governments, states, and federal government?

o From what industry do the states depend upon for shortfalls in taxes?

· Question 2

o What is the history of federal income tax?

o What are some of the impacts of the Trump 2017 tax plan discussed in class?

· Question 3

o In terms of present value, what is the benefit of deferring taxes on income received?

o What should it be weighed against and why?

o What are opportunity costs and risks associated with deferment?

o How does it impact wealth creation?

o How could the 2020 US Presidential Election impact your answers? Why?

· Question 4

o In terms of investments, which provides better tax treatment for investors and why:

§ Income received by a 1099 or by a K-1?

· What are the benefits and drawbacks to both?

· Question 5

o What is the concept behind calculating net present value?

o What is it dependent upon?

o How does it impact taxes, salaries?

· Question 6

o What factors determine whether an investor should purchase a tax-free municipal bond?

o What factor are considered when purchasing a taxable corporate bond versus a tax free municipal bond?

· Question 7

o Please explain the three factors to determine income.

o What are the implications for tax deferred investments?

· Question 8-30 points

o Please discuss and explain in full the issues, pros and cons of taxing wealth versus income?

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