Progressive and regressive taxes have an impact on funding for programs in our society, including education. The differences between the two provide for a very controversial view of how school districts plan budgets. Real estate taxes, earned income and personal income taxes, sales tax, and lottery revenue are factors that make up these differences.
Progressive taxes increase as taxable base amounts increase. Progressive taxes have an effect on income and expenditures. The U.S. federal income is an example of progressive tax because the higher income a person has, the higher the tax bracket rate. This affects the rich. The higher their income the more they have to pay in taxes (Wikipedia)
Regressive taxes are the opposite of progressive taxes; regressive taxes that takes a larger percentage from low-income people than from high-income people. A regressive tax is generally a tax that is applied uniformly. This means that it hits lower-income individuals harder. Some examples include gas tax and cigarette tax. For example, if a person has $10 of their income and must pay $1 of tax on a package of cigarettes, this represents 10% of the person's income. However, if the person has $20 of income, this $1 tax only represents 5% of that person's income (Investopedia).
People are charged many types of taxes, which some are progressive and some are regressive such as property or real estate taxes. The property tax is based on the value of the property, and it is a regressive tax (Combs, 2010). Most of the revenue from this tax is used toward education in the state of Texas, and it is collected annually. Residential and Commercial properties are taxed. Second, there is the sales tax. In Texas, the state charges a sales tax of 6.25%, is...
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...t of Fort Bend in southeast Texas, the property tax is $1.30 per taxable asset value. This revenue makes up 52% of the budget for the district (Fort Bend ISD, 2010). A loss of even a little property tax revenue would hurt the district’s budget and affect the loss of many teaching jobs.
Works Cited
Fort Bend ISD Financial Budget. (2010, March 17). Retrieved from http://www.fortbendisd.com/finance/documents/2010_11%20Budget.pdf
Garner, C.W. (2004). Education Finance for School Leaders: Strategic Planning and Administration. Upper Saddle River, NJ: Pearson Education, Inc.
Kokernak, Louis. (2010). The Growth of Regressive Taxes. Retrieved from
http://ezinearticles.com/?The-Growth-of-Regressive-Taxes&id=3811425
Texas Lottery Supporting Education. (2010, March 17). Retrieved from http://www.txlottery.org/export/sites/default/Supporting_Education/
According to the data obtain from the United States Census Bureau; the state of Texas received the amount of $ 24,500,909 in sales tax revenue in the year 2012, Tennessee $6,512,352, and Utah $1,857,055. The sale tax in Texas percentage is “6.25 % to 8.25% depending on the local cities; Tennessee charges “7%, but the number can vary from 1% to 2.75 %”; Utah is “4.70% to 7.95%. Texas population is approximately 26,06 million; Utah 2,855 million, and Tennessee is 6,456 million by 2012; These numbers show that the state of Texas is bigger in size and population than Tennessee and Utah; however the sales taxes revenue is lower han Tennessee, but higher than Utah’s.
"Institute for Illinois' Fiscal Sustainability." State Funding for Chicago Public Schools. 21 Aug. 2013. Web. 17 Feb. 2014.
Early Grants and Allocations –a supplemental tax was given to schools to enhance school programs.
Seeing as though San Antonio’s education funding is based on property value, poorer districts obviously receive less funding. However, the poor districts are required to pay the same tax rate that the wealthier districts pay but are unable to properly fund their schools whereas the wealthier districts are comfortably able to fund their schools and are much less affected by the tax rate compared to their lower-income counterparts.
To reiterate, the current tax system is thought to be regressive because the tax system does not provide a balance for those with high income and those with low; however, this can be fixed by adopting some aspects of a state with progressive features. For instance, the state of California as a much better tax system than Texas because they have a “graduated personal income tax structure and provides personal income tax credits in place of personal and dependent exemptions” (“California”). If Texas adopted these two characteristics into their tax system this will began to progress because some of the faults in the present Texas tax system is the lack of personal income tax structure and it does not not provide tax credits to low-income taxpayers to offset other expenses. Making these few changes will help Texas greatly; however, making this change will be difficult because the state is comfortable with the tax system they have. Texas does not care to alter the tax system much because although it is weak, it does not take too much away from the overall economic success the state
(TRANSITION: But before we get into all of that, the questions I asked you for my audience analysis revealed that not all of you are as riveted by tax policy as I am-shocking I know-, so I will clarify some of the jargon I will be using. First the progressive tax is a tax system where the tax rates increase with income earned. Let’s say the first tax bracket is set at 50,000 dollars, and the first tax rate is set at ten percent, and the rate above it is set at twenty percent. So, if you make 70,000 dollars, the first 50,000 will be taxed
Then comes the education part, where according to the author Jonathan Kozol in his book Savage Inequalities Children in America’s schools, property tax is one of the main financial distributions that goes towards local schools. In Kozol’s book he quotes that, “typically in the United States, very poor communities place high priority on education, and they often tax themselves at higher rates than do the very affluent communities.
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.
Aaron Hill from Education Portal suggests “ A progressive tax system really acts as a tool for redistributing income from the upper class to the lower and middle class. Those individuals who earn more pay more into the federal government. This helps keeps the income gap from growing wider between the rich and the poor.” Although this is what the government claims most of the money is just recirculated for the federal government to use as it’s own
On the other hand, the poor are stuck with insufficiently-funded public schools. Because neighborhoods are segregated by class and education, schools are financed mostly from local property taxes and state taxes. Children from different school districts will therefore have different qualities of education depending on the class of the community in which they live. For example, in Texas, the ten highest school districts spent $5,423 per student compared to $1,848 per student for the 10 lowest school districts (Kalra 274). The difference in expenditures affects class sizes, teacher's salaries and the facilities.
Even if the state pays a lot of money, that still doesn’t mean that the schools are well funded. In Hawaii, there is only one school district, and the state pays for nearly all of that district’s funding. Only 2% comes from property tax, and the rest comes out of income tax. But think about the industry in Hawaii- farming and tourism, t...
A definite disadvantage to the decentralized system is the local school districts. Local school districts often levy property taxes, which are their major source of capitol. Many problems arise because the heavy reliance on the local property tax causes a disparity in the quality of education received by students in different districts. Rich communities can afford to pay more per student than poorer communities; consequently, the disparity in wealth affects the quality of education received.
Reported in 1995, public education expenditures per student are higher in the nation's smallest districts whereas students receive an average fully adjusted expenditure of $4,862 versus $4,216 in the largest district’s 10,000 students and above. (Johnson 4 ) Since 1995, enrollments in the urban public school system have doubled up to 62 percent in the 2010-2011 school year. Still, they received less money. Local governments rely on property taxes as a source of revenue to pay for schools. Yet people in the urban areas pay the higher tax than suburban and wealthy communities, states on the other hand, relies on The Average Daily Attendance (ADA), which calculates state aid to school districts, tends to discriminate against urban school districts with high absentee rates automatically, and excludes 15 percent of its student aid.
There are numerous accounts for why schools receive unequal funding. Some schools may reside within wealthy areas where the property taxes are higher. According to the Thomas B. Fordham Foundation & Institute in "Fund the Child: Tackling Inequity & Antiquity in School Finance”, the amount of money a school gets depends on where it is located. Some schools may be within wealthier neighborhoods and receive more money as a result. For Example, the 2010 Public School Review report from the Modoc Joint Unified School District in California shows that the high school spends $7,858 per student whereas the 2010 Public School Review report for Tamalpais Union High School District in California shows that the school spends $19,821 per student (2010 Pubic School Review). This serves as a great disadvantage for students who do not live in wealthy neighborhoods because their schools are not receiving the proper funding...
Regressive tax is a tax that is applied uniformly, yet takes a larger percentage of low-income individual 's income and lower percentage of individuals with higher income. Taxes that are regressive include taxes such as gasoline tax and sales tax applied to essentials. If sales tax is a uniform 7% individuals with less income spend a higher percentage of their total income on the tax than individuals with a higher income. Progressive tax is the opposite of the regressive tax. Progressive tax is income tax that takes a higher percentage of the overall income from individuals with high-income than low-income individuals. Progressive tax is used to fund social welfare programs that provide assistance to low-income individuals to assist with meeting