Question

Why the tax code is tweaked on a continues basis?.

Answer 1

Tax code is a collection of tax laws that is enacted by the federal, state and local government authorities. It is a government document (essentially a federal government document) that lays down the rules that different entities have to follow while computing their tax liabilities.

Tax code is tweaked on a continuous basis keeping in mind the state of the economy and the need of the hour. Many laws in the tax code are no longer relevant and hence have to be repealed. Many new laws have to be introduced in the tax code considering the latest changes in the state of economy, per capita income, inflation, interest rates etc.

For instance in the year 2017 the Senate approved major changes in the U.S. tax code. These changes were the most significant changes in the last three decades. The changes that were approved were permanent tax breaks for companies and temporary tax cuts for individuals. This change was introduced in part due to healthy revenues and state of finances of the U.S. government and in part due to political strategy of the Trump government.