A simulation, regression analysis and Delphi survey to search for material inequities resulting from the repeal of income averaging under the Tax Reform Act of 1986

The Tax Reform Act of 1986 (TRA 86) repealed income averaging under the assumption that the lower and wider tax brackets of the new law would prevent taxpayers with volatile incomes from suffering tax inequities. This study objectively tests this assumption. Simulations are conducted, with the use of IRS panel data tapes, to measure the magnitude of the tax inequities at ten different Adjusted Gross Income (AGI) levels under the TRA 86. Regression analysis and descriptive statistics are used to determine factors associated with tax inequities from fluctuating incomes. A Delphi survey is undertaken using nationally recognized tax policy experts, to determine if the inequities found in the simulations justify the costs of reintroducing income averaging. The tax policy experts use a macro perspective, not an individual taxpayer perspective, to determine a point at which inequities from volatile incomes are large enough to warrant the reintroduction of income averaging. The simulation discovered that in every AGI level at least 25 percent of the population suffers inequities. Classifying the taxpayers by AGI, then ranking the taxpayers from the smallest to the largest inequity, the median annual inequity for the top 10 percent of each AGI ranges from $270 to \$4,830. Stating the inequity as a percent of the AGI, the median annual inequity for the top 10 percent of each AGI ranges from.7$0--\$5,000) and highest (Greater than$95,000) AGI levels. The regression analysis and descriptive statistics found that taxpayers with farm, capital gain and self-employment incomes experience above average tax inequities. Taxpayers filing head of household status have below average inequities. Weighing the costs and benefits to all taxpayers, the Delphi survey established that inequities from fluctuating incomes become material when 10 percent of the population experiences inequilities which exceed the greater of $400 or 3 percent of the taxpayer\u27s annual AGI. Combining the results of the simulations and Delphi survey it was concluded that from a macro perspective, the inequities from volatile incomes which exist under the TRA 86 are NOT material and do NOT justify the reintroduction of income averaging

A First Look At The Accounting Information Systems Emphasis At One University: An Exploratory Analysis

Technology has dramatically changed the accounting profession.  One response to this change is the development of accounting programs that emphasize Accounting Information Systems (AIS).  This paper examines the job satisfaction, career paths, job placement and CPA examination success of graduates choosing an emphasis in AIS compared to graduates following a traditional accounting curriculum at one mid-western university.  Survey results show that there are few differences between graduates who selected an AIS emphasis over the traditional accounting major.  There are several reasons that insignificant differences were discovered.  The graduates surveyed were some of the first AIS graduates in the market place.  Thus, employers were uncertain how to best utilize the skill sets of these graduates and in many cases placed these graduates in the same career path as a traditional accounting major.  Additionally, the data was collected in the summer of 2003 form alumni who graduated during the years 1995-2002.  The dot.com bust was fully realized by the summer of 2003, thus, the AIS graduate’s skills were of a lesser value at the time of the survey.  Finally, small sample size is a contributing factor in the insignificant results.  The current regulatory environment (i.e. Sarbanes-Oxley) has created a renewed demand for the skills of the AIS graduate.  Future research will hopefully be able to measure the value of the accounting major with an AIS emphasis from both the student and employer perspective