[This article reviews and evaluates the financial reporting of the federal income taxes of General Dynamics Corporation. Such a review illustrates the material discrepancies that can result between book income and tax return income using generally accepted accounting principles. It also raises doubts as to (1) the relevance of the current disclosure of "effective tax rates" in the income tax note to the financial statements, and (2) whether General Dynamics has fully reported its tax status in its annual reports. We believe that the FASB should require a more complete articulation of a corporation's tax status in its annual reports.]

Reviews the book "Tax Policy and Corporate Concentration," by Alan L. Feld.

This study provides the actuarial computations necessary to delineate the "earned" portion of the Social Security retirement benefit under the current provisions from the redistributive (income transfer) element of the benefit. This is accomplished by comparing the benefits that would be payable under an annuity plan for workers of varying wage levels, family compositions and working periods with the benefits that these same workers and their spouses would have been entitled to under the current Social Security benefit structure. The results show that future retirees can expect to receive sizable transfer payments in almost all cases, but the difference in the transfer amount between single earner and dual earner families will increase. These results have important policy implications and provide a necessary assessment of proposed annuity recommendations such as are contained in AICPA Statement of Tax Policy No. 8, Suggested Improvements for the Social Security Retirement System.

This article reviews and evaluates the financial reporting of the federal income taxes of General Dynamics Corporation. Such a review illustrates the material discrepancies that can result between book income and tax return income using generally accepted accounting principles. It also raises doubts as to (1) the relevance of the current disclosure of "effective tax rates" in the income tax note to the financial statements, and (2) whether General Dynamics has fully reported its tax status in its annual reports. We believe that the FASB should require a more complete articulation of a corporation's tax status in its annual reports.