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Ch23_reading_tax on Risk and Wealth

Ch23_reading_tax on Risk and Wealth

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Published by Katherine Sauer

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Categories:Types, School Work
Published by: Katherine Sauer on Jan 09, 2012
Copyright:Attribution Non-commercial

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09/02/2013

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Taxes on Risk Taking and Wealth (ch 23)Focus on two aspects that might affect the savings decisions of the taxpayers:- Taxation of _______________ Taxes can influence the form that savings takes.- Taxation of the accumulation of ____________________ This occurs in 2 forms:--
 A. Taxation and Risk Taking 
 
1. Basic Financial Investment Model
Domar and Musgrave, 1944:Individuals have a choice of investing in--The government taxes any return from the ________________ asset.The government allows for a deduction against taxable income for ______________________.Result: taxing the returns for the risky asset would ______________________________risk taking because:
2. Real-World Complications
 a. Less-Than-Full Tax OffsetA
tax loss offset
refers to: b. Redistributive Taxation
3. Evidence on Taxation and Risk Taking
 
4. Labor Investment Applications
 
 
 B
. Capital Gains Taxation
 A
capital gain
is:
1. Current Tax Treatment of Capital Gains
 Taxed on
accrual
refers to:Taxed on
realization
refers to:The tax preference for capital gains is hard to eliminate for many capital goods for 2 reasons:--a. ³Step-Up´ of Basis at DeathThe
basis
refers to: b. Exclusion for Capital Gains on Housingc. Capital Gains Tax Rates Through the Years
y
 
1978 ± 1986: taxed on ____% of capital gains on assets held for more than ____ months
y
 
Tax Reform Act of _______ treated capital gains like other forms of income, the top taxrate on capital gains was _____%
y
 
Taxpayer Relief Act of ________ reduced the top rate on long-term capital gains to ___%
y
 
2003 Jobs and Growth Act reduced the top rate to ____%
2. Arguments for Tax Preferences for Capital Gains
 a. Protection against inflation b. improved efficiency of capital transactions
 
c. Encouraging Entrepreneurial Activityd. Evidence on Taxation and Capital Gains
3. Arguments Against Tax Preference for Capital Gains
a. Progressive b. Haig-Simons
C. Transfer Taxation
 A
transfer tax
refers to:2 Types:--
1. Arguments for the Estate Tax
Three arguments:a. progressive

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