Taxes on Earnings 524 Practice Taxes on Individual Income 525 Taxes on Corporate Income 525 Taxes on Wealth 525 Taxes on Consumption 525 Taxation Around the World 525
18.2 Structure of the Individual Income Tax
in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527 Computing the Tax Base 527 Tax Rates and Taxes Paid 529 Application: The Coming AMT Timebomb 531
18.3 Measuring the Fairness of Tax Systems . . . . . . . . . . . . . 532
Average and Marginal Tax Rates 532 Vertical and Horizontal Equity 533 Measuring Vertical Equity 534 Application: The Political Process of Measuring Tax Fairness 534
18.4 Defining the Income Tax Base . . . . . . . . . . . . . . . . . . 536
The Haig-Simons Comprehensive Income Definition 536 Deviations Due to Ability-to-Pay Considerations 537 Deviations Due to Costs of Earning Income 538 Application: What Are Appropriate Business Deductions? 538
18.5 Externality/Public Goods Rationales
for Deviating from Haig-Simons . . . . . . . . . . . . . . . . . . . . . 539 Charitable Giving 540 Spending Crowd-Out Versus Tax Subsidy Crowd-In 540 Consumer Sovereignty Versus Imperfect Information 542 Housing 543 Empirical Evidence: The Social Benefits of Homeownership 545 Tax Deductions Versus Tax Credits 546 Application: The Refundability Debate 547 Bottom Line: Tax Expenditures 549