Essay on Taxation

The congressional proposed tax changes will adversely affect the U.S. middle class. According to Pew Research, which claims to obtain its data through non-partisan demographic research and public opinion polling, the American middle class, defined as those making two-thirds to double the median income, makes up about half the population. Further information in this paper is obtained from reliable sources such as the New York Times and the Washington Post, which are typically regarded as center to left, As well as right-leaning sources such as Forbes magazine, whose chief editor, Steve Forbes, is a major Republican. The Congressional Budget Office and the US Census Bureau also supply reliable, researched data, and both Time Inc, Money, and

In the article Tax reform =Growth, the author Rory Meakin (2012) suggests that Australia has a good tax system but it still has its problems. He compares the tax system between Britain and Australia as well, and discusses the importance for the government to change its approach of raising taxes to make it cheaper, fairer and more legitimate in Australia. The article outlines the complexities of the taxation system in the country, which resulted to the lost of its legitimacy since many people do not understand how much they should pay. It advises the need for the government to make the tax system to be as neutral as possible by eliminating complications that will add confusion to its approach. The journal name tax reform equals to growth and he totally agrees that raising the tax and keeping the tax neutral is the better way to face the tax problems nowadays.

For around three decades, the effects of the US tax policy have been an issue because it has created inequality. According to Bargain (2015), the main idea about tax system policy is that inequality remains in the United states and it isn’t a system fair. Furthermore, no one enjoys paying taxes yet all but the extreme libertarians agree as Oliver Wendell Holmes said “that taxes are the price we pay for civilized society. It shouldn’t take U.S taxpayer 6% billion hours and 168% billion per year to file their taxes”. The burden of paying that price has been distributed in increasingly unfair ways. Taxes on wealth, such as capital gains, are often more subject to a lower tax rate than wages and salaries, which the vast majority of every day.

Taxes are accumulated from the people for two main purposes in today’s world. First, they are used to provide for a number of public goods, such as infrastructure and public education. Second, these taxes are used to redistribute income from the economically successful to the less successful. Taxes are a massive component for any country; they are used to help grow and provide for a number of sufficient facilities to its numerous citizens. Without taxes in our country, it is extremely hard to fund the systems that are a necessity for society to operate as it should. Tax rates depend upon a country’s economic and social goals. In the following paragraphs, the views of America’s liberals, conservatives, and then my personal views on this topic will be shown.

Taxes play a big role in the economy and are a key factor when trying to encourage and promote economic growth. Taxation provides a way to reallocate economic resources to individuals with special needs or low incomes. In the United States, there are several different types of taxes but the main two are federal and state. The federal government cannot tamper with state taxation in any way. Every state has a tax system completely

This article talks about the changes that are going to happen in the next year concerning taxes. It talks about alternative tax (AMT), pass-through proposals, mortgage-interest deductions, child tax credit, medical expense deductions, education, first-in-first-out stock sales, and alimony. These were mostly all things that we talked about during the semester. Throughout this paper I will briefly go over each one of these and talk about the changes and how it relates to our class.

Tax season is not fun. It brings the un-enjoyable experience of sitting in an overpaid tax preparer’s office; it brings another year that the U.S. cannot collect enough taxes to cover the ever increasing budget; and it brings another year that almost half of this country will not owe anything to contribute to our growing financial needs. Currently, these tax problems have become more evident to the public and are being addressed in this year’s presidential campaign. Some candidates are recommending a flat tax structure. Most citizens have a strong misunderstanding of the concepts behind this structure, which has caused the flat tax to fade away, being a figment of past campaign slogans over the last few decades. The flat tax is the

The gap between the rich and the poor in the States is growing. A common solution that has been proposed by many, is to tax the rich and distribute the money gathered from that amongst the poor. From a social justice perspective, the question remains though whether it would be just or unjust to do this. When it comes to the redistribution of wealth or income from the rich to the poor through taxation, the libertarian school of thought would object and say it is cohesion and that the state or majority of people would be stealing from people who happened to do very well in their lives and became wealthy.

All over the world, governments undertake huge public expenditure on behalf of their citizens for the provision of basic amenities and other social services. To meet up with these responsibilities, governments thus require substantial amount of funds. Among the various sources from which can generate income, taxes are the most important and most reliable; contributing much more than any other source. A tax therefore, is a compulsory levy imposed by the government on the income, profit or wealth of an individual, family, community, Taxation is the inherent power of the state, exercised through the legislature, to impose financial burdens upon subject within its jurisdiction for the purpose of raising revenues to carry out the legitimate duties of government (Kenned & John, 2014)

Taxes are a contribution to state revenue, and they are viewed as an issue to Americans. American’s view the tax system as a bad thing and give the government no room to try to change the tax system due to fear. The tax system today in the United States is progressive, the percentage of income individual pays in taxes tends to increase with increasing income. People will pay a higher rate in taxes with higher income. Today’s tax system has too many loop holes which are ways accountant can break through the tax system without paying. Our system today is very complex with brackets that people fall into.

This progressive tax system has been merited for helping prevent wealth discrepancies in a society from getting too large. When the wealth gap increases beyond a certain level the risk of social instability and strife also increases. Large differences in wealth is seen by a lot of economists as one of the factors that contributed to the Wall Street Crash of 1929.

Each individual pays income taxes when they receive enough wages, and they also pay sales taxes when they purchase for goods. There are diverse kinds of taxes which are should be paid by both sellers and buyers. Many politicians of a country greatly consider the fairness of paying taxes to receive high attention (206). The fairness of taxing based on the ideal tax system which is fair, equivalent and clear to all taxpayers. There are two conflicting principles of fairness of taxes; one is the benefits principle and another is the ability-to-pay principle.

The optimal tax theory typically suggests that the tax system should maximize a social welfare function subject to a government budget constraint, taking account that individuals respond to taxes and transfers. Redistributive taxes and transfers can negatively affect incentives to work, save and earn income but created the classical trade between equity and efficiency which is core problem in optimal income tax. Optimal tax analyses maximize social welfare as a function of individual utilities and sun of utilities in utilitarian case. Further optimal income tax theory is first a normative theory that shows how a social welfare objective combines with constraints on resources and behavioral response to tax policy recommendation. Firstly, the problem at hand, secondly, the

The last main reason of the imposition of taxation is redistribution of income. Taxes can be used to narrow income inequality, thus helping the poor.

The primary purpose of the tax system is to collect the revenue needed to fund the operations of the union government including its promises and commitments. Tax revenues may not fully match the government spending each year but over time, the union government needs to be able to raise sufficient revenue to cover its current and expected financial obligations. Decisions about spending and the role of government have a direct impact on the governments ultimate revenue needs (Walker 2005). Tax reform invariably forms a key component of structural adjustment programmes of developing countries and for good reasons. The most important reason is that when a country undertakes to reform its economic structure to overcome chronic macro economic imbalances and remove impediments to growth, it is imperative to bring the tax system too in line with the basic thrust of the structural reforms versus enhancing efficiency in the allocation and use of resources by promoting competition and avoiding needless interference with market forces (Amaresh Bagchi). A basic tenet that has guided our tax reforms, as those of many other countries in recent years has been ‘widens the base, reduce the rates’. The aims of equity, efficiency and simplicity are served best it is argued, when the base of the tax is comprehensive be it income or consumption. In a regressive tax system lower income tax payers pay larger percentage of income in