Tax Codes (430 words)

Do an internet search and identify tax codes which favor the rich (when you get information from the internet, do not copy word for word; paraphrase it and provide sources for your information. If you were a policymaker what changes would you implement in the tax code that might might increase private saving and national saving. If this policy is implemented, how would it affect investment in the country?

Tax codes that favor the rich include the 1) mortgage interest deduction 2) capital gains tax rate 3) step up in basis 4) retirement savings and 5) charitable deductions . Some of these codes are designed to incentivize personal savings which is necessary to fund investment and stimulate economic growth. As indicated in a speech by Governor Edward M. Gramlich (2005) , the declining rate of savings was a concern even before the financial crisis. He outlined weaknesses in some of these tax codes and related policies and suggested several changes. Many of his suggestions, or some variant of them, were actually implemented in the American Taxpayer Relief Act of 2012....

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