Social Studies
January. 6, 2018
IHPCH
Jermain Edwards
Are Taxes Fair ? The question “Are Taxes Fair ?” can be simple or complex depending on an individual’s perspective and/or tax bracket. This question challenges an individual to first look at themselves and do some research to undoubtedly identify whether taxes are fair or rather fair to whom. In reading and researching, the common idea was that most people think taxes are not fair as they are often less beneficial to tax breaks in comparison to wealthier individuals. In this sense, the view is that
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A flat tax is which all income is taxed at the same amount it eliminates a payroll tax , estate , federal taxes, and deductions . The government would no longer collect other types of taxes. Wealthy individuals would have to pay more due to a progressive tax,all middle to lower class individuals will be affected by the regressive tax. Because of the regressive tax , which causes lower income people to pay more than the rich people. This is the opposite of progressive tax in which the tax rate increases as the taxable amount increases. For example sales tax is a tax receipts from sales a good scenario to look at would be a tax rate of 8.0% for the state of New York. Times the amount of money that you would get taxed on such as a pair of wireless headphones that cost $7.00. Would total $7.56 in sales tax. Therefore if a rich person makes 100,000 a year and a person with a lower income makes $10,000. The person that makes $10,000 a year.is only able to save a couple hundred dollars per year , while the person who makes $100,000 a year can save $40,000 a year. With an income tax charge of 20% the person with $10,000 would have to pay $8,000 dollars and the other person with the higher income of $100,000 would have to pay $80,000. This affects lower income people more because little or no money is left for getting what they need such as food , car payments , clothes
The “Fairness of Taxation or Wealth Tax” is where taxes are calculated by the net worth of the person or the couple (household). This would be hard for tax collectors to determine each and every component of net worth of a person.
Should the American tax system remain the same, where individuals’ income is taxed based on how much one makes with loopholes and deductions? Should we consider a system that would eliminate progressive income taxes, taxing everyone at an equal rate through the Flat Rate Tax, or should taxes be collected through national consumption of retail goods and the Fair Tax System? Our current system of taxation is a varied percentage rate based on different income brackets. Many say that it violates our constitutional rights through unequal taxation. Multiple deductions, loopholes, special rates, and a complex system of regulations all characterize our Federal Income Tax System, prompting many to question why it is still being used (Peters, 2013).
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.
II. Implementing a flat tax without significantly increasing the deficit is impossible without shifting the burden from the rich to the middle-class, instead our current progressive tax policy needs to be changed so that it is simpler and does not allow corporations to abuse the tax loopholes.
In the United States, there are many different types of taxes. Some of them are goods and services, income, and property taxes (debt.org). The two most common taxes are the Flat Tax and the Fair Tax. Basically, Flax Tax is one income tax rate that everyone has to pay. Fair Tax is a proposal amendment to tax laws that removes the federal and state income taxes and replace it with a federal retail sale tax (Investorwords.com). Our current tax income system that we use is called Progressive Tax which is the tax system that takes a larger percentage from those who earn a higher income than those who earn a lower income (Investopedia.com). Out of all those taxes, the best one that I believe that can replace our current tax system is the Flat Tax because research has shown that it can be very beneficial for our economy today.
Many ponder the idea of federal taxes and whether the wealthy deserve to pay a higher percentage rate of their overall income. That is, they argue that because our society needs more equality and a lower national budget deficit, taxes on the rich must be raised. This specific topic has been discussed for decades, and due to the severely different perspectives, it is unclear whether the two sides will ever come to an agreement. President Barack Obama and much of the Democratic Party strongly lean towards raising taxes on the rich, while the conservatives and the Republican Party heavily lean towards a more balanced flat tax. However, after extensive research and focus on what would be best for the equality of individuals, the nation and its economy, this paper will firmly prove that the top one percent should not be taxed any more than they are today.
Introduction: In the year 1862 during the civil war congress implemented the first income tax in America. It was 3% per year. However, it was not until 1913 when the 16th Amendment to the Constitution was passed, which granted the government the ability to impose a tax on individuals’ income. Since then it has been an issue to determine how much people should be taxed. Tax rates in America change drastically; for example, in 1963 a person in the highest tax bracket would give 90.8% of their income to the government. In contrast, that same person would only pay 28.0% in 1988. The tax rate for income tax is an issue because for every dime that someone pays in taxes is one dime that they are not able to spend themselves. Additionally, people
The U.S. along with only 6 other countries use the progressive tax, the progressive tax is a very unfair and inconsistent taxing system.This system has a varying rate that taxes the higher income homes with a higher rate,and the lower with a reduced rate.The Flat tax is a taxing system that has one flat tax rate for all ranges of income homes. The flat tax has been proposed multiple times throughout legislation , but not once has it been taken seriously as a cure to fix the current tax problems.The U.S. needs to adopt the Flat Tax because it is a simplistic system that would be fair to use and also promote economic growth.
For the past eleven years, opponents from the left and right side of the political spectrum have lambasted the FairTax. Politicians who don’t want to relinquish the power given them by the current tax system are the proposal’s biggest opposition. They don’t want to give up the withholding system. They don’t want to give up the sixteenth amendment. They don’t want to lower taxes. They oppose the FairTax for the sake of their own greed and agendas. Despite all their baseless criticism, the FairTax is continuing to gain support on the grass roots and political levels. The statistical data and scientific analysis, compiled over the last eleven years, is overwhelming proof of the FairTax’s ability to bring transparency to the tax system, broaden the tax base and to fix the U.S. economy.
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 United States tax system is in complete disarray. Republicans and Democrats agree that the current tax code is complex, unfair, and costly. The income tax system is so complex; the IRS publishes 480 tax forms and 280 forms to explain the 480 forms (Armey 1). The main reason the tax system is so complex is because of the special preferences such as deductions and tax credits. Complexity in the current tax system forces Americans to spend 5.4 billion hours complying with the tax code, which is more time than it takes to manufacture every car, truck and van produced in the United States (Armey 1). Time is not the only thing that is lost with the current tax system; Americans also lose great deal of money complying with the tax code. Resources that are currently wasted on record keeping, filing forms, learning the tax code, litigation, and tax avoidance. The cost of complying with the current tax code totals about $200 billion annually, or $700 for every man, woman, and child in America (Armey 1). The overwhelming consensus that the current tax system is inadequate has ignited the search for tax reform. There are numerous proposals for tax reform; one particular proposal brought forth by various conservatives is the idea of national flat rate income tax. The idea is to replace the current income tax with a single rate that everyone pays.
Like most taxpayers, many politicians also agree that tax reform is necessary in the United States, but that is where the agreement stops between the politicians. Michael Kinsley states that “Reform is any change in the tax code that you favor” (1). Depending on each taxpayer’s personal income situation, what one person favors could be vastly different from what another favors, which is why tax reform is so complicated. Thus the problem comes with trying to figure out what is the best approach to take, how to do it, and when to do it.
The flat tax will make taxes fair for all people. No matter what race a person is, what social class a person is in, or who they’re friends with, they will end up paying the same rate. Every single taxpayer will have to sacrifice just as much of his or her life as the next person down the road. One of the three main reasons for taxes is to maintain fairness. This is most reasonable ways to maintain fairness. The wealthy will still be paying more money than the poor person, but they both have the same tax burden.
Wealth inequality is the uneven distribution of resources in a given state or population, which can also be called the wealth gap. The sum of one’s total assets excluding the liabilities equates the person’s wealth also known as the net worth. Investments, residents, cash, real estates and everything owned by an individual are their assets.In reality, the United States is among the richest countries in the world, though a few people creating a major gap between the richest, the middle class and the poor control most of its wealth. For more than a quarter of a century, only the rich American families have shown an increase to their net worth.Thisis a worrying fact for the less fortunate in the country and calls for assessment (Baranoff, 2015).
Tax cuts are only benefiting the richest people, and will widen the inequality gap between the rich and the poor. A recent report from the Congressional Research Service states, “as the top tax rates a...