That would cause such people to engage in transactions with no other purpose than to even out their taxable income from year to year.
The US Treasury just indicated that it is considering allowing the indexation of the basis of an asset for capital gains purposes.
Corporations however can do carry-back from a loss year to a gain year and avoid the problem. I can think of two: Allow all income from capital to be netted so that capital losses could be set against dividends and interest as well as capital gains.
An ergumant for that is that you can to a certain extent convert dividends to capital gains and vice versa by use of cedrtain trsactions. Another remedy for lots of volatility in taxation would be to use cumulative accounting from year to year.
I will give you examples of anomalies that bother me: Tax should not rise faster than proportional to income.
That is, it can be progressive in dollars, but if it’s progressive in percent then it is quadratically pregressive in dollars, and therefore a concave, non-linear curve.In cumulative accounting, the tax due on your lifetime, inflation-adjusted capital gains is computed by spreading the total gain evenly over the number of years in question and applying the tax rate prevailing in each year, and then the tax already paid is subtracted.The remainder is divided by your life expectancy to get the amount to be paid in the current year. The 50% of FICA paid by your employer is tax deductible for the employer but the 50% paid by the employee is not.This is very welcome as the present system of a lower tax rate for long term gains compared to shiort term gains is not understood by financially illiterate socialists like Joe Biden.Having different tax rates for long versus short term gains creates huge complexities in the tax code such as “constructive sale” upon writing a call option more than strike price intervals below the current price of a stock.That puts social security at a disadvantage compared to 401ks and IRAs where a person’s contribution is usually tax deductible.The result is that social security has to be subsidized out of general taxation which creates the impression that social security is a big budget drain.Online Dissertation Writing offers Taxation dissertation help by the Masters/Ph. qualified writers to the college or university students based in the UK.Their vast knowledge and expertise in the field of writing effective Tax dissertations make them provide online Taxation dissertation writing assistance.If you too are facing difficulties in writing a dissertation on Tax, contact our native writers right now to score excellent grades for your dissertation!If you are dreaming of scoring top grades for your dissertation on Tax, then ‘Online Dissertation Writing’ is the most trustworthy dissertation writing service provider in the UK.