Taxes Essay, Research Paper
TaxesAn income tax is a tax based on the income of an individual or a business. In the United States, personal income tax accounts for approximately 45% of the total tax revenue.i Income tax was first used as a temporary method of helping finance the Civil War. Soon after the Civil War, the income tax was repealed. Then, in 1913 the 16th amendment was ratified to allow income taxation. At its simplest form there are three main types of income tax, a progressive tax, a regressive tax, and a proportional tax. A progressive tax means that taxpayers will be taxed at a higher percentage rate the higher their incomes are. A regressive tax collects a smaller percentage of income the higher the income. Lastly, a proportional tax would collect at the same percentage rate for all incomes or a flat tax. At present, the American income tax system is, quite frankly, a mess. In my opinion, the current tax system is far too complex purely because of present “fair” actions to fix past abuses. Confusion, fairness and a lack of simplicity have been the major problems associated with the individual. Ex-President Jimmy Carter once called the U.S. tax code a disgrace to the human race.ii With tax reform on the lips of many on Capital Hill, many different tax reform proposals have floated to the surface. Of the many proposals a few standout. A Consumption Tax is one of the more favored tax reforms being discussed by politicians and economists alike. It entails paying tax only on that part of your income which was spent during the fiscal year. This tax, as discussed in class, is a regressive tax due to the fact that the poor spend 95-100% of their income whereas the rich spend a much smaller percentage of their income. A Retail Sales Tax is another of the new tax proposals being discussed. It consists of a national sales tax of 6-8% coupled with no exemptions or any deductions. This tax is also regressive due to the same fact that the poor spend the majority of their income while the rich do not. Perhaps the most talked about tax reform proposal is the flat tax proposal. The proposed flat tax is being spearheaded by Richard Armey the Republican Representative from Texas. A flat tax consists of many different aspects that would promise a new way Americans would view taxes, good or bad. The flat tax would consist of the following provisions:Americans would be taxed at the flat tax rate of 20% for the first three years that the taxwould be enacted. After the initial three years, the tax would fall to 17%. The tax ispaid on gross revenue. Taxes would no longer be paid on dividends, capital gains, orinterest. No deductions from gross income. Deductions for mortgage interest, retirementaccounts, charitable contributions, moving expenses, and child care would be eliminated. Each adult taxpayer would get a personal exemption of $13,100 and $5,300 for each childdependent.iii There have been several different variations of the same basic idea of a flat tax. In the early 1990’s, then-presidential candidate Jerry Brown had a slightly different version that version contained a flat tax that was lower and more deductions were also included.iv Currently a Pennsylvania senator, Arlen Spector, is proposing a flat tax reform that resembles that of House of Majority Leader Dick Armey.v Although there are many advocates of the flat tax there are still hard line critics. They believe that the tax is a regressive one putting the rich and the middle class in the same tax bracket while leaving the poor behind. Critics also believe that the flat tax reform being proposed would be to “simplistic”. Simplicity is, on the other hand, one of the reasons that advocates of the flat tax believe it would be so warmly accepted by the American public. Found below is a possible tax return that could be the size of a post card.
Possible Tax Return1.Gross Income __________2.Personal and Dependency Exemptions-__________3.Taxable Income __________4.Taxes Paid (multiply line 3 by 20%/17%) __________ Simplicity is only an ends to the means that Armey and others feel will benefit the American tax payers and the American government. Mainly, a flat tax would cut down on the cost of operating the Internal Revenue System (IRS) which has been estimated as tens of billions of dollars. The IRS still can’t account for approximately $120 billion in lost tax revenue due to underreporting of income and overstating of deductions or exemptions.vi With a flat tax there is little leeway with deductions and exemptions so the potential for lost revenue is lower. In addition, because of the simplicity of the filing process, people who may not have filed in the past may be inspired to fill out the easier form. A flat tax, according to Christopher Farrel columnist for Business Week, would “eliminate the need for so many tax lawyers and accountants.” This new reform would also contain the potential for downsizing the IRS. It would also eliminate current spending on record keeping IRS audits, and tax preparation fees paid by tax payers.vii Many would argue that this is a much lower tax rate for the rich in this country. True indeed, but the idea behind this according to Armey is that with the freed up income, the rich will invest back into out economy. There is no doubt according to Michael ruby, Co-Editor of U.S. New & World Report, that taxes would fall for almost all households in the US. He is quick to point out that those households earning more that $200,000 would pay significantly less than before the flat tax. Ruby believes thatThe fairness issue can be addressed by creating a second tax bracket as mentioned above. By using a two-bracket approach, the fairness issue can be addressed without sacrificing the simplicity to any great extent. To build on this, under Armey’s flat tax proposal, a family of four can make over $29,000 and still pay no taxes whereas now they may pay over $6,000 in taxes.ix Another advantage of the flat tax proposal is that people will have more money to spend on health care. The government may be able to lower spending with regards to Medicare and other programs such as Welfare and some child care programs. There is also strong evidence suggesting that reduced tax rates also have the advantages of increasing the incentive to earn income, while lowing the incentive for taxpayers to find loopholes. Overall, the Flat Tax Proposal is a very intriguing proposal. There seem to be a lot of benefits that are coupled to it, but with any proposal, at this point there are still some loopholes associated with it. Of the current tax proposals, no one proposal has spurred as much discussion except perhaps a national sales tax. Companies such as H&R Block, accountants, and tax lawyers will be sure to find on capital hill lobbying against this new easy tax system. The outcome will be interesting to see. i Holcombe, Randall G. The New Grolier Multimedia Encyclopedia, Grolier ElectronicPublishing Inc. 1993 See. Income Taxii Michael Ruby. Three Cheers for a Flat Tax, U.S. News & World Report. February 20, 1995pp. 76iii GOP Tax Proposals, INTERNET. Site-edf.www.media.mit.edu/taxintro.html SEE DickArmey’s Flat Tax Proposaliv Jeff A. Schnepper and Charles J. Santilli. Flat Tax Follies, USA Today. July 1992. pp. 27v Malcolm S. Forbes Jr. Fact and Comment: Specter of the Flat Tax, Forbes. March 27, 1995.pp. 27vi Christohper Farrell. A Jumble Only a Flat Tax Can Untangle, Business Week. January 9,1995. pp. 39vii Ibid. pp 39. viii Ruby, pp. 76ix Department of the Treasury, Internal Revenue Service. 1040NR Forms and Instructions.1995. pp.22
Другие работы по теме:
Kinglois Xvi Essay Research Paper Kinglois XVIVersailles
Kinglois Xvi Essay, Research Paper Kinglois XVI Versailles, France Dear honorable Kinglois XVI My friends and I were wondering about how high the Taxes are in this town, and that it would be much better if the 1st and 2nd estates were taxed as well as us. You would benefit from this idea very much because of how much more the 1st and 2nd estates bring in the money.
Springtime Quest Filing An Income Tax Essay
, Research Paper The Springtime Quest: Filing an Income Tax Return Springtime is a period of rebirth of nature, the promise of warmer weather, and a sign that an impending deadline to file my income tax report is at
Heavy Tax Essay Research Paper Have you
Heavy Tax Essay, Research Paper Have you paid your taxes yet? Why are taxes so crucial for a country? Because taxes are the main revenues of the government and just like a father has to work and get pay to support the family, taxes support the growing and the maintaining of the country. Being one of the essential incomes of a state, taxes certainly affect people??s life.
The Taxes We Pay Essay Research Paper
The Taxes We Pay In the United States, the history of taxes goes far back in time. During the Civil War, there was a tax on income for a short period of time. In the 1890?s, the tax was ruled unconstitutional by the Supreme Court. In 1913, the 16th Amendment was passed which gave the United States the power to tax personal income.
Taxes Essay Research Paper Taxes A Necessity
Taxes Essay, Research Paper Taxes: A Necessity For Everyone Imagine not having to pay taxes. Many of us dream about what we d do with that solid chunk of money that gets sent away to the government. We don t exactly know where that solid chunk of our earnings goes. What we do know is that it can t go exactly where we want it to.
Poverty Essay Research Paper There are many
Poverty Essay, Research Paper There are many different income groups that make up the world. There is high income, middle, and low-income groups. These include countries such as the United States, Britain, Austria, and Switzerland. The middle-income groups account for as much as one-third of the world s humanity.
Reflective Essay About Rite Of Passage Essay
, Research Paper Reflective Essay “Do things because you can, not because you should.” (P.155) In the book Rite of Passage by Alexei Panshin there is a philosophy, in the fake universe, that says that people should do things because they can, not because they should. I think it is basically saying that if we know we can get away with things, go for it.
Business Income In Ny 1998 Essay Research
Paper Project on business income for NY The principle source of income for the state of New York for 1998 is taxes. (in millions) Real Property 7,217 Sales and use 3,121
Social Security 2 Essay Research Paper Social
Social Security 2 Essay, Research Paper Social security is very essential for most of today s older Americans. Since it was begun, it has been a sort of protection for retired workers, and for disabled workers. Social Security allows people to live independently and still have their dignity. There are about 150 million workers protected by Social security and more then 44 million people receive Social Security benefits.
Colonial Rule Essay Research Paper The English
Colonial Rule Essay, Research Paper The English colonies set up forms of representative government consisting of an appointed governor and a legislature, a law making body elected by voters. Having an appointed governor and a legislature sometimes led to tensions. The governor and the assembly frequently disagreed over taxes, the selection of other goverment officials, and defense of the colony.
16 Amendment Essay Research Paper The amendments
16 Amendment Essay, Research Paper The amendments were wrote to amend parts of the Constitution of the United States. I have got info in the sixteenth amendment. I will be writing this report in the order that our note taking guide goes.
Econ Essay Research Paper The federal progressive
Econ Essay, Research Paper The federal progressive income tax has been an issue that has been argued on the floors of Congress, in front of the United States Supreme Court, in front of television cameras, and around the dinner table. The tax served its purpose in supplementing revenue during the Civil War and World War I, but continued taking from Americans’ income in peacetime, allowing fewer dollars to be spent on goods and services.
Flat Tax Essay Research Paper Dear Colleague
Flat Tax Essay, Research Paper Dear Colleague, Of all the shortcomings of the current income tax system, the costs associated with the code’s complexity are certainly the most wasteful and unnecessary.
The Flat Tax Essay Research Paper TITLE
The Flat Tax Essay, Research Paper TITLE: THE WRONG WAY TO SELL A NEW IDEAMany people would like you to believe that flat tax is so named because it will flatten your finances. That at the least is the intended conclusion. By eliminating personal deductions like mortgagee interest payments, the study claims, the flat tax would reduce housing values in this country by upwards of 10 percent.
The Flat Tax Issue Essay Research Paper
?The Flat Tax? A Reaction Paper The article on the Flat Tax system was actually one that I could relate to in terms of personal taxes. I have heard of this ?new? system over the last five or
Measure 91 Essay Research Paper Is Measure
Measure 91 Essay, Research Paper Is Measure 91 good for Oregonians? No! While many people agree with the principle of Measure 91, which would stop Oregonians from paying taxes on the money that is paid as federal tax, the financial impact of the measure and the uncertainty of it’s intended effects could make this measure financial devastating to the people it intends to help.
Problems In Today
’s Society Essay, Research Paper Problems In Today’s Society There are many problems right now in the society. Some of these problems can be easily solved, or can be impossible to solve depending how bad
Legalizing Marijuana Essay Research Paper Legalizing MarijuanaMarijuana
Legalizing Marijuana Essay, Research Paper Legalizing Marijuana Marijuana becoming legal is a topic every American should agree on. The reason being is it would benefit Americans in three ways; there would be less crowding in jails, it would create more tax income, and it would cut down the amount of crime in the country.
The Personal Income Tax Essay Research Paper
There was not many things that the American people agreed on. Taxes had always been a sensitive subject in American politics. The whole American Revolution was based on the taxation issue. When the personal income tax was instituted, Americans did not feel that the government needed to be paid by the American people.
Progressive Taxation Essay Research Paper A Discussion
Progressive Taxation Essay, Research Paper A Discussion on Progressive Taxation The United States government taxation system is based off the fundamental progressive taxation theory. Most people don t fully understand the taxation system and question the validity of the system the United States currently has.
Civil Disobedience Essay Research Paper Thoreau was
Civil Disobedience Essay, Research Paper Thoreau was once sent to jail for refusing to pay his taxes and I support this episode of civil disobedience as justified. Thoreau did not pay his taxes because he objected the use of the revenue to finance the Mexican War and enforcement of slavery laws. He did not request for his money to be used for the enforcement of slavery laws, therefore felt he had the right to protest and act out civil disobedience.
Our Government 2 Essay Research Paper Our
Our Government 2 Essay, Research Paper Our Government Government today is a lot different then the government that was created by our founding fathers. When they sat down to sign the declaration of independence, I wonder what they would have thought of our country as it exists today. The government has become an uncontrollable beast much like the government those heroes gave their lives to escape.
Civil Disobeiance Essay Research Paper Civil
Civil Disobeiance Essay, Research Paper Civil Disobedience Civil disobedience is the refusal to obey civil laws. This refusal is in the form of nonviolence. People who use civil disobedience are usually protesting a
TriState Comparision Essay Research Paper TriState Comparision
Tri-State Comparision Essay, Research Paper Tri-State Comparision The State of Missouri is very comparable to the majority of the United States based on several identical variables. In order to shorten the length of this study, three states, including Missouri, have been chosen to compare variables.
Persuasive Letter Essay Research Paper O
Persuasive Letter Essay, Research Paper O & Y Tax Service October 19, 2000 Hilda Black 622 N. Bank Lane Park Forest, IL 60045 Dear Ms. Black, Thank you for your letter describing the problems about your tax problem. I believe that I informed you of the appropriate charges on your account when you talked to me about the transition you were about to make.
Health Care Essay Research Paper Health care
Health Care Essay, Research Paper Health care is an issue that everyone has to face no matter where they live. In great Britian thecosts for medical treatment is payed for by the government. In the United States there has beenmuch debate over a national health-care system. As it is today, health-care is paid for by thegovernment, but the money comes from the people s taxes.
Should The Government Of Canada Continue To
Support Of Universality Of Social Services By Increasing The Proportion Of Salaries Given? Essay, Research Paper Should the government of Canada continue to support the universality of social services by increasing the proportion of salaries given to income tax? This question hits a very touchy spot for all Canadians because some agree that a higher portion of an individual’s salary should go to income tax, so a better standard of living could be made by all Canadians, instead of just to the financially blessed class of society.
Food Stamps Essay Research Paper while others
Food Stamps Essay, Research Paper while others think that giving away food stamps is a helpful thing, i think that the gov. should stop distrubuting food stamps. the aqusition and use of food stamps is frequently abused. people can easily obtain food stamps by creating their eligibility even if it involves cheating. one thing i believe that the government should stop handing out food stamps is that most of the people who receive food stamps are capable of working.
Reforming The Texas Taxing System Essay Research
Paper Reforming the Texas Taxing System Texans are some of the most reluctant people when it comes to paying taxes in the nation. The state desperately needs a reform that would change the way taxes are collected but Texans are suspicious of change and would rather settle for the insufficient tax scheme that exists rather than take the chance of reforming it and having government raise taxes or implement a state income tax.
The Difference Essay Research Paper The DifferenceBush
The Difference Essay, Research Paper The Difference Bush or Gore? Will it be the vice president or the governor of Texas to fill the presidency? Even after election day, this is still a very questionable topic. Because of the peoples’ split views, it seems the country has divided itself: half for Gore, half for Bush.