Reform in the Use of Phase-Outs and Floors in the Individual Income Tax System
Posted: 24 May 2001
In this article, Professor Peroni analyzes the tax policy implications of using in the individual income tax system phase-out provisions and deduction floors of the type contained in section 67. He concludes that such provisions increase the complexity of the tax system, violate horizontal and vertical equity principles, and represent an inappropriate, indirect way of increasing the effective marginal tax rates in the code. He concludes that the phase-out provisions in sections 68 and 151(d)(3) and the 2 percent floor in section 67 should be repealed.
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