Interestingly, in most places, a dollar is a dollar. However, under the new tax plans, that may change.
Consider two chefs working side by side for the same catering company, doing the same job, for the same hours and the same money. The only difference is that one is an employee, the other an independent contractor.
For the first time since the United States adopted an income tax, a higher rate would be applied to employee wages and salaries than to income earned by proprietors, partnerships and closely held corporations.
Supporters argue that the revised tax regime is an attempt to update the code to reflect changes in the economy.
1. What do the economists and tax experts across the political spectrum warn about with this system?
2. (Fill in the blank.) The more the tax code distinguishes among types of earnings, personal characteristics or economic activities, the _________ the incentive to label income artificially, restructure or switch categories in a hunt for lower rates.
3.What are pass-throughs?
4. What issue bothered you the most in this article?
Cohen, P. (2017). Tax Plans May Give Your Co-Worker a Better Deal Than You., The New York Times, Dec. 9 (Retrievable online at https://www.nytimes.com/2017/12/09/business/economy/tax-plans-may-give-your-co-worker-a-better-deal-than-you.html)