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Tax Law:

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Define the objectives of modern income tax statutes. (at least 3)
Compare and contrast GAAP and tax accounting. Explain why they are different. (at least 3)
Differentiate between tax avoidance and tax evasion.
Research your readings, the Internet, and other resources to support your argument.

about 400 words, three references

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Define the objectives of modern income tax statutes. (at least 3)
The objectives of modern income tax statutes are to first raise revenues for the government, second, to bring about a more equitable distribution of income and wealth, and the third objective is to support the fiscal policy of the government.
First, the government requires taxation for revenues. These revenues are used for financing expenditure on the operation of the government, public works, social engineering, war expenses, enforcement of law and order, protection of property, enforcement of contracts, legal tender, and roads. Also, the government uses revenues collected from taxes to finance projects related to utilities like waste disposal, energy generation and transmission, and water supply. Social and welfare expenditure by the government is also financed by taxation. These revenues also finance unemployment benefits (2).
Second, the objective of modern income tax statutes is to reduce the inequality between the rich and the poor through the instrument of progressive taxation. Progressive taxes try to keep the incidence of taxes low on those that have a lower ability to pay and keep a higher incidence on those that have a higher income or wealth. Modern income tax statutes required people with higher income pay a higher percentage of that income as taxes. Those that have lower incomes are required to pay a lower percentage. It is believed that if the percent of tax of each dollar increases as the total income increases, it leads to a more equitable distribution of income in the country.
Third, the objective of modern income tax statutes is to support the Fiscal policy of the government. Economists believe that by changing the level and composition of taxation, government can affect the economy by changing the aggregate demand. This depends on the stance taken by the government. If the government spending is equal to the tax revenue there is a neutral ...

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Law for Bills and Paid Taxes

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20. Drinks for the ten now cost just $80."

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men; the paying customers? How could they divide the $20 windfall so that everyone would get his "fair share?" They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each mans bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
"I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man, "but he got $10!"

"Yeah, that's right" exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I"
"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

Answer the question:
What is the wrong in the scenario?
What is the more probable scenario?

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