There has been much debate in replacing the current tax system with a national sales tax that would eliminate individual and corporate income tax, the capital gains tax, and the estate and gift taxes. With the national sales tax consumers would instead be charged on the final purchase of all goods and services at the retail level. If national sales tax were to be put into effect, it would change much of the current frustration with taxes.
With the national sales tax there would be no need to file taxes by a deadline, since everyone would have already paid their share of taxes at the register throughout the year. Taxpayers would no longer have to spend time filling out forms that require them to reveal personal information to the IRS on how
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The national sales tax would put an end to the anti-capital bias, because the national sales tax would only be charged on finished products. Manufacturers are amongst those that stand to gain the most from getting rid of that system and replacing it with the national sales tax. All goods or services would be exempt if they are purchased for use in the production of the taxable goods and services. So, if a manufacturer purchases a new machine that it will use to production, then the product will be taxed instead of the machine. Businesses would also benefit from being reimbursed for their administrative costs …show more content…
The national sales tax would eliminate the individual income tax, corporate income tax, capital gain tax, estate tax, and gift taxes. Instead the national sales tax at the proposed 15 percent would be charged on the final purchase of all goods and services at the retail level. Households at or below the poverty line would receive a rebate for every penny they paid for the national sales tax (cato).
However, the national sales tax could also have regressive effects that benefit the rich. If the sales tax is measured on the dollars spent per dollars of income. Since, the poor spend a greater percentage of their income, it would hurt them the most. The national sales tax could counter act this by providing a prebate of taxes up to the poverty level. The national sales tax would measure and individual’s productivity and the value of their yearly labor instead of just basing taxes on income
Whether or not to keep or discard the Bush era tax cuts for the wealthy, give tax breaks to the lowest tax bracket, and even throwing out the entire current tax code and replacing it with a simpler version, tax code and tax law has been a very controversial topic for the past few years. As it stands, the current tax code has over seventy two thousand pages, compared to the four hundred pages it had in 1913. There are many different stakeholders in this debate including taxpayers, corporations, businesses, etc. Americans for Tax Reform (ATR) is an organization that was “founded in 1985 by Grover Norquist at the request of President Reagan”(.N.p.). Their goal is to create and advocate for a simple flat tax,“...on the belief that they will provide a strong stimulus to investment, employment, and output” (Stokey 1). They promote their organization and represent taxpayers in all fifty states. Along with tax reform, ATR also advocates for individual health care, free trade, and spending transparency (.N.p.). Using very simple and easy to understand images, ATR is able to convey their goals and get information across to the general audience that visits their website.
While this would normally pose a problem to the federal budget, it will not due to current conditions. The amount of money formerly spent on national security, meaning military and defense spending has been severely reduced (Albertson, 139). This frees up a large amount of money to be used for other goals. These goals should be those of improving the standard of living for each and every American and not the immediate reduction of taxes, a goal which many members of the Republican party would like to see pursued. The programs initiated under the policies of the New Deal and Fair Deal should not simply be maintained, instead they should be expanded upon.
However, I believe the Flat Rate would provide the best alternative, as it is the easiest to revert back to the original if necessary while eliminating a lot of the concerns that are raised about our current system such as equality, complexity, and cost efficiency. Works Cited Hall, A. (2001, August). The X-Men: The New York Times. The Flat Income Tax and the Fair Tax Consumption Tax: A Comparison of Federal Taxation Proposals. Retrieved from https://wilmu.blackboard.com/bbcswebdav/pid-4981484-dt-content-rid- 14738969_1/courses/POL.326.DIS.B2T01.FA2013/FlatTaxFairTaxComparison.pdf.
The tax policy in the United States is very confusing. When the tax policy was originally written in 1913 it was four hundred pages. Now, over the past ninety one years, that tax policy has evolved to over 72,000 pages. Since the tax code has become so lengthy and nearly impossible to understand, the topic of tax reform has been in the minds of many. Although, most barely think about tax reform until tax season. It is a controversial subject due to the impact a change in tax code would have on the American people. The two most popular and widely known stakeholders in this debate are the two major political parties in the United States, the Democrats and the Republicans. The two parties share absolutely no common ground on the subject of tax reform, other than thinking the other parties solution is wrong. The Democrats, in general, want to raise taxes on the wealthy, while Republicans, generally, want to cut taxes for everyone (Democratic Party) (GOP). Unfortunately, with the United States economy currently doing so poorly, the parties can no longer afford to remain at a standstill, some sort of compromise is going to have to be made. The implementation of a flat tax, and discarding the current tax system would be a compromise that both parties can agree on and will simplify the tax code, overall benefiting all Americans.
I. You might have heard politicians in the news, talk about overhauling our tax system with a new fix-all idea, the flat-tax. This would simplify our overly complicated tax system and might seem appealing at first glance, however there are serious problems with it.
6. The flat tax replaces the current income tax code, which is very 7. complex, with a system so simple Americans could file their taxes on a 8. form the size of a postcard. What exactly is a flat tax? A flat tax sets 9. into place a single tax rate on all income subject to tax. The hundreds of 10. exemptions, credits, loopholes and deductions now in the tax system 11. would be eliminated to make the single tax rate as low as possible. The 12. cost of using the current tax system totals about $200 billion annually, 13. or $700 for every man, woman, and child in America. A flat tax would 14. reduce those totals by 94% , saving taxpayers more than $100
Fox, Lauren. “Study: Immigration Reform Would Boost Tax Revenues,” US News. U.S.News & World Report, 10 July 2013. Web. 18 Apr. 2014.
One person may see that the increase taxation on the poor and the decrease taxes on the wealthy is not an issue because the wealthy pay a lot of taxes already. However, many people don’t realize the fact that, yes, the wealthy are paying a lot of taxes because they make more money, but they can afford to pay more. Recently, in a CNN article, more than forty millionaires want their taxes to increase, which proves the fact that the wealthy have plenty of money to give back to the community. In addition, their just going to keep getting wealthier and wealthier by the
The current tax system that the United States uses contains several flaws. First of all, it is very complex. It is comprised of many various variables that can create loopholes. These loopholes can cause two equal income families to be paying very different tax rates. In fact, there are 480 different types of tax forms (Website). The current tax system is also very unfair for the wealthy. Because it is a progressive tax, it is higher for people who have higher incomes. People should not be punished for being successful. If a flat tax policy were instituted, then it would simplify the complicated tax system, create fairness within the economy, and promote a desire to thrive financially.
The use of taxes is one of the government's favorite ways to make its presence known in the economy. While this method seems blatantly obvious, many of the ways the government uses the money collected by taxation is not. Some of the money it takes is used to fund other programs designed to "protect" consumers and to "create" jobs. Be...
Bag tax will help the environment heal from all of the damage we have done. For a bag tax will make people think twice before buying a bag that is bad for the panet and they may be willing to get a paper bag. Plus the government could use the tax
The four types of taxes this paper will discuss are income tax, sales tax, property tax, and user fees. Income tax was not permanently established until the 16th Amendment was passed in 1913. Most federal taxes had been previously derived from excise taxes on tobacco and alcohol and other consumer goods. The US Constitution, when written and still continues to, legitimize taxation in the United States through Article I, Section 8, that Congress has the power to lay and collect taxes, duties et al, pay the debts or provide for the common defense and general welfare of the United States (Cornell Law LII). Investopedia defines income tax as ‘a tax government(s) impose on financial income generated by all entities within their jurisdictions (Investopedia, 2014). Businesses and individuals are required to file an income tax return every year to determine if they owe taxes or qualify for a refund. That is determined by measuring the total income one earns to a designated tax rate, calculating one’s taxable income, which are some or all items of income reduced by other adjustments or expenses in that tax year. There are different subcategories of income tax; there is a federal income tax that is set by the federal government, apart from a few states, there is a state income tax that is imposed on their respective residents, as well as the possibility of there being local income tax ...
However if only indirect taxes are implemented, the revenue could be useful to fund not only negative advertising, the consumers who wish to relieve the taxation burden could change to other uses to carry their groceries such as a shopping bag that can be used over many times.
The government use of taxes plays a crucial role in today’s economy as well as personal finances, it has and will continue to leave its mark on the world we live in.
The progressive tax strategy makes sense. It would not make a lot of sense to have low-income individuals paying the same amount of taxes that higher-income individuals do to fund safety nets that many of those same low-income individuals use to meet their basic needs. Higher taxes on low-income families would in turn cause the low-income families to need to use more safety net programs. It is easy to see how the regressive tax strategy makes it difficult on low-income individuals to due to a higher percent of their income being used to pay things such as sales tax. There does not appear to be a way around this due to everyone in every stated being expected to pay the same rate of sales tax. The general tax revenue is needed to provide states and local governments to provide all the services that the residence need, use, and expect. It is not unusual to hear individuals complain that their property taxes increased to provide funding for local schools or funds to improve the road ways. If the local government did not provide free public education or improve the road ways individuals would be upset to lose the services that they are accustomed to