4 Pages Posted: 26 Mar 2011
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.
Keywords: Tax Base, Inclusive, Exclusive
JEL Classification: E62, H2
Suggested Citation: Suggested Citation
Listokin, Yair, Tax Inclusive, Tax Exclusive, and Tax Bases in Between. Tax Notes, Vol. 130, No. 9, February 2011; Yale Law & Economics Research Paper No. 427; Yale Law School, Public Law Working Paper No. 228. Available at SSRN: https://ssrn.com/abstract=1793357