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Abstract: 

Taxpayers with variable incomes potentially face disadvantages in the computation of annual tax liability. Graduated tax rates, combined with phase-outs in tax benefits tied to increasing income levels, effectively increase tax liability during high-income years. Conversely, deductions or credits allowable in lowincome years may provide comparatively modest tax benefits, if indeed they produce any benefit at all. As a result, such taxpayers face higher total taxes on lifetime income as compared with their counterparts with more consistent income levels.

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Affiliations:  1: Creighton University School of Law.