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Reflection about principles of taxation
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To the members of parliament
I am writing to you in regards towards the current tax rates and the amount of tax that taxpayers pay. I firmly believe that we are being oppressed by the outrageous tax rates that we are living by, when someone has finally accumulated enough income to move up a tax rate, the higher tax rate could possibly subtract enough money to return them to their previous tax rate and position in societies high rackey. I propose that a substitute for the current tax system be made so that instead of multiple tax rates we have a single tax rate of 10%. This would benefit the economy because, it would increase the income of households and increase their savings, it would increase their consumer spending and the amount of GST
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With the increase of their kept income it would also increase both their savings and consumer spending. For less financial families and people the increase in savings would help them to improve their lifestyle and solve their financial problems. If these people can improve their own lifestyle, and solve their own financial problems then the government will not have to spend as much resources assisting them. This would also mean that those with a substantially high income would keep 90% of their income which is 20% more tax than what the current tax system.
Another way a tax rate of 10% would benefit us is that it would increase the consumer spending. With the increased amount of kept income they can save and spend more, for example if someone has a monthly income of $15,000, with the current tax rate they would pay $2,625. But with the tax system I propose they would pay $1,500, that leaves them with $1,125 added to their income, with this they could save all of it, save some of it or spend all of it, so in most of these cases the government will receive more indirect
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For example with less funding they can not build new schools in rural areas so the people of that rural area will be less educated and non-literate or with less funding they can not build new roads so there will be a large amount of traffic jams on existing roads.
Another issue with this alternate tax system is that it creates imbalance. As people would keep 90% of their income, it means that the wealthy who have a substantially high income will just keep on becoming wealthier and wealthier as there is no higher tax rate for them, like how people with an income of over $70,000 are taxed by 33% to equalise them to people who pay 10.5% tax due to their lower income of $0-$14,000.
To conclude although it leaves the government with less funding and the wealthy only getting wealthier, the economy is far better of with this alternate tax system as they keep 90% of their income, it increases their savings and consumer spending, and it aids the homeless and unemployed to become self reliant for their basic needs. If we do put this tax system into use we will see New Zealand turn into a utopia, an economy based on paradise.
Yours faithfully
Richard
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.
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.
In addition, the current tax system in Texas us not beneficial because it is considered regressive. The tax system is regressive because it does not help in lessening the gap between the classes and it does not include beneficial characteristics. The Texas tax system will benefit from adding a personal income tax structure and proving personal income tax credits. If these changes were made to the current tax system, Texas will benefit greatly economically and socially because the wage gap between the lower classes and upper classes will decrease and more balance will be a
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
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 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.
Because all economic brackets are taxed equally under a flat tax, earning more money is no longer discouraged. Because there are no more marginal tax rates, people will have incentive to work more without worrying that the extra money they make will be taxed higher. It is said that the economy would grow by 5.
Whether the government should impose a tax on employers to provide workers with benefits such as unemployment insurance or mandate employers to provide workers with benefits, which are normally benefits such as health insurance or workers compensation will ultimately depend on how much their employees value the benefit. Mandated benefits are those benefits that are protected by federal law. Firms are liable to make these benefits available to their employees and failure to do so will result in severe penalties. Payroll tax is relatively different from mandated benefits for the reason that payroll taxes are imposed on the wage of employees, which are either paid by the workers or the firm. When analyzing to see how successful a mandated
...sion. When a police of taxation results in overall economic prosperity, the system is more effective because it benefits all of the taxpayers due to the improved economy. In addition, progressive taxation provides incentives for vital economic activities. The interest on home mortgage payments is a tax deductible on the personal income tax which encourages the purchasing of homes and provides aid to homeowners. Dependents, such as children, may reduce the level of taxation to support families across the United States. Said incentives would not be present in a flat tax because it requires all members of society pay the same percentage of their income regardless of socioeconomic standing. Progressive taxation is more effective because incentives help the individuals participate for important activities, while under a flat tax system, such incentives would not exist.
While the tax rate and tax base of GST though are relatively low and narrow. “The current tax system is not going to keep up with the expenditure forecast. States haven’t got the fund to provide the services that community expects.” Mr. Tom Seymour (PwC tax managing partner). “Personal tax rates are already high in Australia and corporate tax is at the top of OECD corporate tax rates.” As a result of the limitation in reforming income tax and corporate tax, to provide more satisfactory public services, boarding the GST base and/or setting a higher GST rate is
... rich, this would somehow be the great equalizer and bridge the ever increasing income gap between the wealthy and the less fortunate. However, this concept could not be further from the truth. In essence, this would not solve anything. The unequal distribution of wealth is an erroneous and irrefutable perception America will always be left to face. Whether intentional or not, the unequal distribution within American society is seen as a flaw in our nation’s history.
In conclusion, If this wealth tax is done fairly and logically then it would be a incredibly good solution to bridge the gap between the rich and the poor as well as creating a climate for social reconciliation and substantive equality.