A GOOD TAX SYSTEM
Defining Tax A tax, as defined by the Taxation UWI text book, is a legal obligation to pay a certain percentage of income or profits to government imposed on taxpayers, that is, any person or organization required by law to pay tax. Legal penalties would be forced upon taxpayers for failure to make tax payments.
Characteristics of a good tax system A Tax System, according to the online Free Dictionary is “a legal system for assessing and collecting taxes”. For a country to progress through their collection of taxes it must entail a good tax system. According to Adam Smith’s The Wealth of a Nation, he noted four main characteristics of a good tax system namely:
(1) Taxes imposed must be equitable;
(2)A Tax System should
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Taxes should be collected and paid at the most appropriate time for the tax collector and taxpayer in speaking in terms of convenience. For example, income tax collected at source. Taxes that are difficult to administer should not be imposed on the taxpayer. Finally, according to Adam Smith, taxes imposed on taxpayers should be certain rather than random. Taxpayers should be aware beforehand the amount of tax required to be paid and how it is to be paid to government. The tax system should be simple, in terms of tax payers as well as tax collectors are well aware of the requirements. It should be balanced in the sense that not only one set of people should be taxed. A good tax system should be able to generate sufficient revenue for government expenditures. Administration must be honest and fair, although a country may have the majority characteristics of a good tax system, if administration is unfair it can bring about different outcome as the ones intended. The characteristics mentioned above determine how much revenue is produced, the fairness of the tax system and its ability to produce economic
This great country known as Canada, is governed smoothly because of the agreements and rules that have been in place since the beginning of confederation. The Canadian Constitution is one example of these rules. The Canadian Constitution is not just one single documentation, it is a collaboration of documents that make up one enormous document (Dyck 261). The six basic principles of the constitution are: responsible government, federalism, judicial review, the rule of law, constitutional monarchy and democracy; which all helped to shape the Constitution and therefore Canada (Dyck 266).
“No taxation without representation!” A fair tax system was what the American colonists were looking for and one that many say we are still trying to achieve. Today, while we are all represented in government and are all required to pay taxes, some still perceive the system of taxation as unfair, allowing for specialized interests, loopholes, as well as more/less taxation based on income. 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?
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.
The outcomes of the French and Indian war, led up towards the separation of the colonies from the government of Great Britain. One of the major problem that led to the American Revolution; was that Britain spent too much money on the French and Indian War, and wanted the colonies to help pay their debt. Therefore, Britain started to add taxes on specific goods in the colonies. The colonists were really disturbed about the taxes and because they did had no representation in Parliament. Moreover, the decision over the American Revolution is a significant period of time that molded the United States. Although, the American Revolution took place many years ago; several debates still linger to this point.
Texas is one of the seven states that have no state income tax. This means the state does not impose an additional state income taxes on someone’s earnings, but there is still a federal income tax. While many claim this is beneficial to all of Texas citizens and promotes population growth others find it disadvantaging. Their is many disadvantages and advantages to not having a state income tax.
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.
The author is a editor and writer for a textbook publishing company. She argues that there are pros and cons of the system that is in place now, as well the new proposed flat tax system. With the flat tax system it would be easier for businesses and individuals because the tax would be simpler making taxes easier. There would be more drawbacks with the flat tax system such as: fewer jobs for accountants—no tax deductions. States would also be allowed to implement their own taxes. For those reasons they believe that the current tax system is the best system and people would not support a flat tax. The circumstances that cause the chapter to be written is that there could be a need for new textbook to be written. The purpose of the article is to educate students about the government, especially in America, this chapter was about taxation. The audience are students of either history or politics. He believes it will not be used in America: “The plans sound straightforward and have much to recommend them. But convincing voters and taxpayers to embrace them is a monumental task. People complain about their taxes, and the thought of taxation taking on a radically different form is a lot for people to
Tax season is upon us and many Americans are scrambling around trying to get theirs finished by the end of the dead line. This time of year is not a joyous occasion, everyone on edge most of them pondering how much they will have to pay. While others are wondering if they will get as much as they thought they will, or are they going to be one of the unlucky few to be audited? I am one of those people, anxious, and waiting at the edge of my seat for that hammer of reality to come crashing down over my head. With each new election year comes new arguments and battles fought within the halls of Capital Hill, but who is right and is there a middle ground? I will present you with the facts as I have found them; the choice is yours to determine what is right and what is wrong.
Taxation has always been a major controversy. Just like any major corporation, the government is constantly looking to raise revenue. The easiest and fairest way to do this is by taxing the people. However, how the people will be taxed is always an issue.
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 Advantages of Federalism Federalism was selected as the most appealing system of government in 1787, primarily because of lack of feasible alternatives. Confederacy had been tried by the 13 states under the Articles of Confederation, and found to be lacking, in that it did not provide adequate cohesiveness between the individual nation-states. However, widespread loyalty to state government and identity prevented the adoption of a fully unitary system. Instead, founders chose federalism as a moderate option which could best meet the needs of a people desiring national unity, but demanding local representation and authority as well. Further consideration revealed the multiple benefits of a federal system.
The tax system should be organized in a way that allows the wealth to be redistributed evenly throughout the economic classes, which promotes the belief that the wealthy should be taxed at a higher percentage. Taxing at a higher percentage is fallacious, as it skews the income proportions being paid into taxes. If a person were to earn $40,000 annually, and pay 25% in taxes, they would be contributing $10,000 to the government, while someone earning $400,000 that was taxed at 25% would be contributing $100,000. These different incomes are taxed at the same proportion, which consequently changes the amount that have to pay in taxes based on their income, while still allowing them to have fair compensation for different levels of work done. Taxing incomes at the same percentage still promotes equality without removing
The famous literature on principles of taxation was embodied in Adams Smith “Canons of taxation”. Since then, economies have adopted (and adapted where necessary) these basic principles for what is regarded as the most important tool of fiscal policy.
Albert Einstein once said, “The hardest thing in the world to understand is income tax” (IRS, 2016). Fast forward to present time and the current tax structure for the United States is still very complex. The U.S. tax system stems from economic, political and social contexts factors. All these factors have created different types of tax systems, progressive, regressive and proportional.