Abstract

After describing the current provisions of the Internal Revenue Code relating to income averaging, Professor Schmalbeck analyzes those provisions from a policy perspective. He concludes that the conventional horizontal equity arguments advanced in defense of income averaging are insubstantial, and that no other policy justification is of sufficient strength to justify the large revenue loss associated with income averaging. Although outright repeal of the averaging provisions may be the best solution, Professor Schmalbeck also explores several more modest amendments to the averaging provisions.

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