Taxation of Imputed Income
Many countries, such as the United States, tax imputed income only in certain limited situations. Imputed income is sometimes difficult to measure, and tax policies regarding imputed income can have political consequences. For taxpayers, not taxing imputed income creates a tax incentive in favor of owning over renting, and in favor of self-service over hiring. For the economy, not taxing imputed income directs economic activity away from activities associated with extreme and severe division of labor.
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