Economics Today: The Micro View (19th Edition) (Pearson Series in Economics)
19th Edition
ISBN: 9780134479835
Author: Miller
Publisher: PEARSON
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Question
Chapter 6, Problem EFCT
To determine
Why might people be willing to sacrifice dollars to avoid “feeling bad” about floating tax laws?
Concept Introduction:
Tax avoidance can be described as using tax reliefs and allowances in a way in which they were not in
tended to be used. Tax avoidance may also involve the re-labelling or re-characterisation of a transaction which was undertaken primarily to claim a tax advantage, and not primarily for business reasons. Tax avoidance often involves contrived, artificial transactions that serve little or no purpose other than to give rise to a tax advantage.
Some Examples of Tax Avoidance:
- Taking legitimate tax deductions to minimize business expenses and thus lower business tax bill.
- Setting up a tax deferral plan such as an IRA, SEP-IRA, or 401(k) plan to delay taxes until a later date.
- Taking tax credits for spending money for legitimate purposes, like taking a Work Opportunity Tax Credit for hiring workers in your business.
- By finding a way to avoid paying taxes by finding a hole in the tax code is tax avoidance, not evasion. Accelerated
depreciation is one such example. - Getting a competent, honest tax expert can save one from going over the line to tax evasion.
Expert Solution & Answer
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Check out a sample textbook solutionChapter 6 Solutions
Economics Today: The Micro View (19th Edition) (Pearson Series in Economics)
Ch. 6 - Prob. 6.1LOCh. 6 - Prob. 6.2LOCh. 6 - Prob. 6.3LOCh. 6 - Prob. 6.4LOCh. 6 - Prob. AFCTCh. 6 - Prob. BFCTCh. 6 - Prob. CFCTCh. 6 - Prob. DFCTCh. 6 - Prob. EFCTCh. 6 - Prob. 1CTQ
Ch. 6 - Prob. 2CTQCh. 6 - Prob. 1FCTCh. 6 - Prob. 2FCTCh. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Prob. 7PCh. 6 - Prob. 8PCh. 6 - Prob. 9PCh. 6 - Prob. 10PCh. 6 - Prob. 11PCh. 6 - Prob. 12PCh. 6 - Prob. 13PCh. 6 - Prob. 14PCh. 6 - Prob. 15P
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