Ethics in Federal Income Tax Legislation: Expectations vs. Reality for Low-Income Taxpayers

Abstract

Federal income tax laws often provide potential tax benefits for various groups of taxpayers based on specific social or economic policies. Some of these benefits are targeted specifically at low-income taxpayers while other benefits are targeted more generally but can still apply to low-income taxpayers. In certain cases the benefits actually available to low-income taxpayers may be less than expected when the legislation was passed. This paper discusses some tax benefits that presume to benefit low-income taxpayers. Discussion of these specific tax benefits will lead to discussion of ethical issues that may arise for those who legislate these tax provisions. Legislators might be deceptively creating discrepancies in a complicated tax code to appear to provide benefits for low-income taxpayers when, in fact, they know these benefits are limited or nonexistent. In the alternative, the ethics of competence in understanding the tax laws legislated is relevant: Legislators may be voting on legislation they do not really understand.