Numerous politicians are in favor of reforming the United States tax system to consumption tax. Our basic tax system is tax that the government imposes on all working individuals including businesses. Per law, all workforce women, men, and young adults are required to file an income tax return every year; this can dedicate if they owe any taxes or may be eligible to receive a refund. To determine such taxes owe or refunds, the government utilized a progressive tax system, which higher income earner pays a higher tax rate compared to those who earn a lower less. This tax system is a crucial part or role to the government after all, this is their primary source of funds to support their activities and to serve the public.
On the other hand, consumption tax imposes on goods and services like sales tax, tariffs, and
The effects from consumption taxes may seem welcoming for the bulk of taxpayers, but it too seems threatening for the economy. This type of tax system brings more job opportunity and enables people to save more money, which both helps sustain a stable growth for the economy. In order to stable the economy, the government collects their revenue directly from consumer goods at the point of sales through companies or retailers, which enables business to keep booming and make profit . Clearly, this seems to maintain stable cycle and yet it also generates problems within the consumption tax system. The system could also jeopardize the economy through high sales rate, creating a higher unemployment rate, which causes an inflation and affecting certain class levels than others. If the government was to replace the current income tax system with consumption tax now, this would threaten their funds towards public services. More likely, businesses would take advantage of the taxes and thus decrease consumer goods and services. Overall, consumption tax does not seem any fairer than the income tax
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.
Many debates have been waged over the decades on what will be taxed, on who shall be taxed and how taxes are collected. Since the 16th Amendment was ratified in 1913, the debate has intensified, centering on how high to make the income tax rate. Most Americans were not concerned since the Amendment was sold to them as something that would only affect corporations and the rich. With ever increasing fervor these corporations created lobbyists to convince Congress to exempt them from some or all of the income tax. The big breakthrough in this was taxing the worker directly with payroll taxes during World War II. This method of collecting income tax was sold to Americans as temporary, but Congress has extended it indefinitely and the public has become used to it. The next few decades saw the debate revolve around creating tax breaks for individuals in an attempt to modify behavior or spending. This has resulted in over 67,000 pages of tax code and an entire industry devoted to tax compliance and evasion, with the unintended behavioral change of corporations and the rich parking their money outside of the United States in small island nations to avoid taxation. These offshore accounts are estimated to hold $10 trillion dollars, a number approximate to the national debt. The FairTax Act should be enacted because it eliminates all federal income taxes for individuals and corporations, eliminates all federal payroll withholding taxes, abolishes estate and capital gains taxes and repeals the 16th Amendment; thus eliminating the need for offshore accounts.
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.
(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
It is not only is the tax system progressive in the United States, but the tax proceeds collected is
Deficit spending happens when a government grows its debt, meaning that its spending is greater than its income. (Deficit Spending, 2008) Deficit spending is a fiscal policy, that when used appropriately can do some amazing things, like pull the United States up from its bootstraps effectively ending The Great Depression. President Hoover increased government spending by 50% and used the money to fund public works and infrastructure projects from 1928 to 1932. (Deficit Spending, 2008)
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...
The tax money is used to support our government. Without taxes our government would not be standing, nor would it be one of the strongest governments in the world. Some ways our tax money is used by the government is to support our military, transportation departments, sanitation departments, the education and welfare systems. Our military protects our freedoms from other nations. The transportation departments provides safe roads and bridges for us to travel on.
A major element of The New Tax System is the goods and services tax (GST) which enables the Government to reduce income tax, abolish a range of hidden taxes and ensure that the tax is paid by those who consume goods and services.
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 ...
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
In our opinion government spending is better than tax cuts. Government spending increases the employment as well as the income of the people of the country, though tax cut only increases the wealth of the people who may not spend the extra money earned and help in the growth of the economy.
The system that government uses to raise money, to finance the country and to fund their activities for serving the public is called the Taxation. Taxation system has different types such as: the proportional tax, the progressive tax and the regressive tax. This research paper focus on the advantages of progressive tax system in which we believe that it is the best way of solution with respect to setting tax among families because this type of taxation obliges only a specific rate for every income tax bracket instead of the proportional tax system which uses latter’s fixed rate.