Question

During the tax reform discussions, President Trump proposed eliminating the head of household filing status (see Donald Trump’s Tax Plan Would Hit Single Parents Hard). Address the following points in your discussion post: What are the fundamental purposes of filing statuses in the tax system? Which of Adam Smith’s principles of taxation do filing statuses provide to the tax system? Why? Who in our society would benefit or suffer if the head of household filing status is eliminated (address both groups)? What are some impacts of the head of household filing status (benefits and detriments, both intended and unintended)? Your initial posting should be 250-500 words and must be submitted by Thursday, midnight, of this week.

Answer 1

1. American tax system to promote equity among small and large tax payers have segregated tax payers based upon their income and family basis. There are provisions specific to every class of tax payers based upon the income and the expenses so that the burden of tax is not the same on every person and he can get benifits as per his status.

2. Canon of Equility which states that person should be taxed as per his status

3. The most advantageous group would be of married couple who will see lesser tax rate brackets while single parents would be hit the most in absence of personal exemption

4. the benfitis of HoH are that it enjoys higher tax brackets and standard deductions to reduce the overall tax burden.