Tax Notes, August 23, 2004, p. 843 The complete version of this article will appear in 41 SAN DIEGO L. Rev. No 3 (2004)


Our graduate income tax structure provides an incentive to shift income to lower-bracket family members. However, some parents have much more latitude to shift income to their children than do others. Income derived from services and private business-by far the majority of American income-is less favored than income derived from publicly traded securities. The rationale given for this discrimination is that parents in services or private business, as opposed to those in securities, do not actually part with control of their property. This article explores these tax broader (yet subtle) tax benefits and their impact on the majority of children seeking a higher education. Proposed solutions to this lack of uniformity are discussed.


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Date of this Version

October 2004