What are taxable differences between the two types of income

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Until the 1980s, unemployment compensation payments were not taxable. The rationale was that people who were collecting unemployment did not have the ability to pay taxes, just like people collecting welfare payments. In the 1980s, there was a change in the tax law that made unemployment compensation payments taxable.

Question 1: Compare the tax consequences of unemployment compensation versus workers compensation.

Question 2: What rationale/concept do you believe could justify any taxable differences between the two types of income?

Reference no: EM132472146

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