Income tax in the United States ordinary income, capital gains, and creditable foreign taxes. The owners then include these items in their own tax calculation. The fund itself is not taxed, and distributions are treated as a return of capital to the owners. Similar rules apply to real estate investment trusts and real estate mortgage investment conduits. The United States imposes tax on all citizens of the United States, including those who are residents of other countries, and U.S. corporations. Federal income tax is imposed on citizens, residents, and U.S. corporations based on their worldwide income. To mitigate double taxation, a credit is allowed for foreign
Hall income tax and 1960, the court rejected proposals for a general personal income tax. However, in 1981, 1991, and 1999, three different Tennessee Attorneys General issued opinions that a general income tax would not violate the state constitution. In December 2004, a commission established to study the state's tax structure said the Hall income tax was regressive, anti-competitive, and "unfairly selective." However, the Institute on Taxation and Economic Policy (ITEP) said the Hall Tax is actually the only major progressive tax levied in Tennessee—amounting to 0.4 percent of income for high-income taxpayers compared to 0.0–0.1 percent for less affluent Tennesseans. The Tennessee