Description of Enterprise Zone Proposals (H.R. 6 And Administration Proposal) : Scheduled for Hearings Before the House Committee On Ways And Means On October 17-18, 1989 Jcs-16-89

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In this circumstance, because of the taxpayer's low initial tax rate, the taxes deferred may actually be worth less than the taxes owed at the later date when the taxpayer is in a higher tax bracket.
Equity considerations Equity issues are also raised by the proposed enterprise zone leg- islation. Horizontal equity would require that taxpayers in similar situations be treated by the tax system in the same manner. Verti- cal equity would require that taxes be assessed in line with the tax- payer
...'s ability to pay. To the extent taxpayers with identical eco- nomic incomes bear different income tax burdens as a result of the enterprise zone tax incentive programs, the goal of horizontal equity is not attained. To the extent that the benefits of enterprise zone tax incentives accrue primarily to high income taxpayers, the vertical equity of the income tax system may be compromised.
Tax incentives may be structured as either deductions or credits.
When taxpayers face different marginal tax rates, deductions yield different dollar amounts of tax benefits depending upon the tax- payer's tax bracket.


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