A Client Has Recently Learned of a Proposed Tax Bill

question 63

Essay

A client has recently learned of a proposed tax bill that would increase the tax rates on investment gains by 5 percent. The president does not support this increase. Please describe for your client the process by which new tax legislation is created and how the president's disapproval may influence the enactment of the bill.

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Definitions:

Proximity Effect

In social psychology, the phenomenon that physical or psychological closeness increases the likelihood of attraction and positive feelings among people.

Interpersonal Liking

The positive regard or affection one individual has for another, often a crucial component of friendship or other personal relationships.

Primacy Effect

The tendency to remember and give more importance to information that is encountered first in a series.

Information

Data, knowledge, or facts obtained from various sources, used to understand events, concepts, or processes.