Tax Inclusive, Tax Exclusive, and Tax Bases in Between
Yale Law School
Tax Notes, Vol. 130, No. 9, February 2011
Yale Law & Economics Research Paper No. 427
Yale Law School, Public Law Working Paper No. 228
Some taxes, most notably FICA, apply to a base that is neither tax inclusive nor tax exclusive. This note provides formulas for expressing tax rates on hybrid tax bases in tax-inclusive and tax-exclusive terms, and demonstrates that obligations under the Self Employment Contributions Act fail to track obligations under FICA because of confusion about the appropriate tax base adjustment.
Number of Pages in PDF File: 4
Keywords: Tax Base, Inclusive, Exclusive
JEL Classification: E62, H2
Date posted: March 26, 2011
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