Wrap-up Questions for Chapter 3
- In what ways – good or bad – do you think exclusions from gross income affect markets? It may help to consider one example, e.g., the market for health care.
- What does it mean that an exclusion may be “captured” by someone other than the taxpayer Congress intended to benefit? Consider the exclusion from gross income of scholarships or
the rental value of parsonages.
- Why is the receipt of cash so rarely excluded from a taxpayer’s gross income? If an employer gave an employee a gift card to a particular store, should the employee be treated as
having received cash for purposes of the income tax? Are there additional facts you might want to know?
- Are there any statutory exclusions from gross income that you would like to see repealed? Which ones and why?
- What is deadweight loss? Which exclusions do you think cause the most deadweight loss?