AJ 025 Lecture Notes - Lecture 24: Legal Drinking Age, Contract Clause, Trust Company
2 Oct 2020
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Document Summary
Article i, section 8 gives congress the power to lay and collect taxes . Article i section 7 specifies that the taxing power of the federal government is vested in congress and all revenue bills must originate in the house of representatives. Primary function of taxes is to raise funds for government functions that have been deemed necessary by the political process. Taxes might be used to alter behavior to regulate. Businesses are entitled to recover the cost of their capital investments over time. Congress has made several changes in the speed with which the cost can be recovered in order to induce investment during times of slowing economic activity. Taxing laws are used to promote marco-economic policy. Regulatory aspects are also reflected in their impacts on specific industries. Interest paid on mortgages for personal residences is deductible to encourage the purchase of home, which also represents a subsidy to the housing industry.
