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although the foundation of any tax system is the raising...

Question: although the foundation of any tax system is the raising...

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Although the foundation of any tax system is the raising of revenue, additional tax policy objectives are: * Economic considerations such as control of the economy, encouragement of certain activities and industries, and encouragement of small business * Social considerations such as non-taxability of certain employee benefits, educational credits and deductions, disallowance of expenditures contrary to public policy, and discouragement of certain behaviors *Equity considerations such as alleviating the effects of multiple taxation and recognizing the wherewithal to pay concept.

Depreciation, through the pace of cost recovery, is used for to control the economy, encourage certain activities and for the encouragement of small business. Discuss how these policy objectives are met. You may want to look into the history of the amount of deduction allowed by Section 179. What events (both natural and terrorist based) helped shape this policy? How did the TCJA affect depreciation policy with respect to Section 179, bonus depreciation and real property rules? How do you think these changes in depreciation influence all three of the economic considerations? How do excise taxes (sometimes called sin taxes) seek to influence consumer behavior as a social consideration? What about the deductibility of penalties, bribes or kickbacks? How have the education incentives impacted the economy of the country?

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