The kiddie tax law was originally established to prevent well-off families from abusing the strategy of shifting unearned income to their children, where it would be taxed at a lower tax rate than their own.
Individual income taxes as well as corporate taxes are now far more rooted in the shifting sands of volatile business income and capital profits rather than in the terra firma of wage income that stabilizes payroll taxes.
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Back in the heyday of using trusts for shifting income, if a trust contained one of those powers, like the power of the grantor to withdraw property from the trust and replace if with property of equal value, someone who thought the trust was being used to shift income, would consider that power to be a defect.
The Jan this year payments are thus the first opportunity we have to see the effects of income shifting, changes in work patterns, higher pension contributions perhaps, possibly even emigration.
Australia released draft revisions to tax laws on Thursday, which it said were designed to stop big firms, including the local arm of Google, from shifting their income to countries such as Holland or Ireland where the tax rates are lower.
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The studios that survived coped with a loss of income by shedding overhead and talent and shifting to ad-hoc creative teams.
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Only time will tell if a market will exist for their homes when they are ready to sell however the income constraints and lifestyle demands of a shifting population may dictate a very different future.
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The low corporate tax (and the 1:2.25 differential between it and the income tax) encourages a lot of tax shifting.
That was kind of the Achilles heel that Congress used to attack income shifting with trusts.
And they can redistribute resources geographically, providing insurance when one part of the country is hit by disaster or recession and shifting income from rich regions to poor ones.
Anticipation of at least some higher tax rates has already resulted in income shifting that will, ironically, result in higher tax revenues this year but a relative dearth after higher tax rates come into effect.
The U.S. Internal Revenue Service is auditing how Google Inc. avoided federal income taxes by shifting profit into offshore subsidiaries, according to a person with knowledge of the matter.
They include more oversight over the financial system and executive pay, extending health insurance to the 15% of Americans who lack it, shifting energy consumption from fossil to renewable fuels, and redistributing income from the wealthy to the middle-class.
Shifting the composition of the trust fund's portfolio in itself raises neither the savings rate nor national income: the fund would own more shares and fewer bonds, the private sector more bonds and fewer shares.
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