Which of the following income items would be included in the Haig-Simons definit

Question

Which of the following income items would be included in the Haig-Simons definition of comprehensive income: Pell Grant money to students, tuition scholarships granted to students by colleges and universities, employee health care premiums paid by employers, Disability benefits, unemployment insurance, social security benefits, net proceeds from selling a Leonardo da Vinci painting, employee health insurance premiums paid by employers? (Name an item of income currently not taxed that Haig Simons would consider part of a per son's income.)

Explanation / Answer

1. Pell Graant money to the students - Grant of money to students is not a part of Haig-Simmons definition of income.

2. Tution Scholarship by colleges & universities - Scholarship by colleges & universities is not income as per Haig-Simmons definition of income.

3. employee health care premiums paid by employers- The same is income in kind to the employee and is therefore, income as per Haig simmons definition.

4. Disability benefits- Disability benefits paid by the employer are the part of income of Haig Simmons.

5. unemployment insurance- Unemployment insurance provided by the employer is the tax on the employer and will not increase the welath of the employee. Therefore, it is not included in income.

6 social security benefits - Employer part of social security benefits is income as per Haig Simmons as it increases the consumption power of the employee. But employee part of socail security is withheld from his salary and therefore is already included in gross salary.

7. net proceeds from selling a Leonardo da Vinci painting- It is income as per Haig definition as it leads to capital gains and adds to the wealth of the person.

8. employee health insurance premiums paid by employers - heath insurance premium is not included in taxable income as per IRS bbut the same is considered as income as per Haig Simmons definition of income.

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