Removing Inflation Distortions From The Tax Base – The 1984 Solution
The Tax Reform Act of 1986 was a great achievement and it really did represent a step toward a more rational tax system. But what happened ? As it turns out using the tax code as an instrument of social and economic policy is just too big of a temptation. It seems too much like a free lunch.
Tax Court Judge Emphasizes Magnitude Of Losses In Denying Horse Breeding Deductions
Mitchel and Eric clearly wanted to have a high-quality horse-breeding operation, and they spent generously to demonstrate that they were serious players in the Standardbred universe. But we find little evidence that they conducted this activity in a “businesslike manner,” i.e., in a manner intended to generate a profit. Many hobbyists desire to have a high-quality activity, but that does not necessarily mean that profit making is their goal. We regard this first factor as important in our analysis, and we find that it strongly favors respondent.
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Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.