Congress plans to amend the federal individual income tax to eliminate the deductions for medical care, educational savings, charitable contributions, and home mortgage interest. Which of the following statements is true?

Question

Quizplus · Accepted Answer

The amendment will reduce the complexity of the tax by eliminating multiple deductions. This will also increase the neutrality of the tax as it will treat all taxpayers equally regardless of their expenses related to medical care, education, charity, or home mortgage interest. Therefore, statements A and C are true. However, the amendment will not increase the horizontal equity of the tax as it will eliminate deductions that were available to all taxpayers irrespective of their income levels.

Congress Plans to Amend the Federal Individual Income Tax to Eliminate