Ch14 TAXATION OF PERSONAL INCOME IN THE UNITED STATES（课件）- 《财政金融英文版》同步教学（人民大学版）

TAXATION OF PERSONAL INCOME IN THE UNITED STATES C h a p t e r 14 Tax Reform Income tax in the U.S. is continually being reformed in hopes of simplifying it. In 2001, Congress enacted the Economic Growth and Tax Relief Reconciliation Act (EGTRRA): Reduction in MTRs for all brackets Reduction in the “marriage penalty” Increase in child credits, tuition credits, contribution to tax-deferred retirement accounts Jobs and Growth Tax Relief Reconciliation Act of 2003 accelerated many EGTRRA provisions. EGTRRA changes will expire at the end of 2010 unless it is renewed by Congress. Obama Plan Cut income tax for households with less than $250,000 annual income Increases in marginal tax rates on the upper 2 percent of income earners Tax cuts for senior citizens, those without health insurance, first-time homebuyers, and families with college age children Calculating Taxable Income Taxable income – portion of income received by individuals that is subject to personal income tax Gross income – all income received during the year from taxable sources Adjusted gross income (AGI) – gross income minus any allowable adjustments Personal exemption – certain sum of money a taxpayer is allowed to deduct from AGI that varies with number of dependents claimed Standard deduction – fixed dollar amount that is adjusted for inflation each year and varies with filing status of the taxpayer Itemized deductions – expenses deducted as alternative to the standard deduction from AGI in figuring taxable income Calculating Taxable Income Tax Rate Structure Different tax rate schedules apply to different taxpayers, depending on filing status: Single, married filing jointly, married filing separately, head of household Tax bracket is a range of income subject to a given marginal tax rate (MTR). As of 2009, the tax schedule contained six tax brackets. Tax Rate Structure Tax Preferences Exclusions, exemptions, and deductions from the tax base Justified on various grounds: Administrative difficulty i