4

Taxes

Important Details You Should Know

Key Topics Covered in This Chapter

  • Taxes for different legal forms of business
  • Progressive tax rates
  • Marginal rate
  • Tax credits versus tax deductions
  • Tax loss carrybacks and carryforwards

INCOME TAXES in the United States are a big, complex subject. Congress has made them that way. When federal income taxes were first instituted in 1913 under the provisions of the sixteenth amendment to the U.S. Constitution, the tax return consisted of only one page, and the entire tax code filled less than fourteen pages. Today, at over twenty thousand pages, the U.S. tax code is the product of years of incremental additions, tinkering, and special exceptions for certain companies and industries. And Congress hasn’t ...

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