Question: DQ1: DO THE RICH GET RICHER?
Most people have heard that the rich get richer because they are not taxed as much as other people due to the deductions available to them. Given what you have learned about deductions, do you believe that a multimillionaire can minimize his or her taxes to effectively pay less than a person making $60,000 a year? Why or why not?
DQ2: TAX LAW AND PUBLIC POLICY
Congress uses the tax code to influence our behavior. Examples include deductions for mortgage interest and property taxes to steer people to home ownership instead of renting. Tax credits for purchasing products that use alternative energy are another incentive. Likewise, deductions for charitable contributions encourage charitable donations. Is this a good (i.e., proper) way for Congress to achieve economic objectives? Can you identify other tax deductions or tax credits that encourage particular behaviors?