The progressive tax system is the best out of all three. Progressive taxes tax high-income citizens more than it does compared to low-income citizens. Currently, the United States has a progressive tax system. People who receive an income of $9,275 annually pay 10% income tax, while people who earn a higher income can be taxed up to 40%. The progressive tax system helps low-income citizens by reducing the percentage of tax for those who can't afford to pay the tax. Progressive taxes rely on people with higher income to help fund the majority of things such as roads, snow removal, and first responders. Many say that progressive taxation is prejudicial against high-income citizens. Many also say that progressive taxation is another way to try to redistribute the wealth, saying that they fund social welfare programs. However, this has been tested and according to Investopedia, this has been proven false. …show more content…
Flat taxes applies the same tax rate to every taxpaying citizen, regardless of their income. For example, if a person makes $100,000 a year, with a 10% flat tax rate, then he makes $90,000 annually after taxes. If a different person makes $200,000 and is taxed at the same rate, then he’d have $180,000 after taxes. Both people are taxed 10% of their income. Russia is one of the biggest countries to use a flat tax system. Russia has a 13% tax on all citizens, no matter their income. There has been economic growth in countries such as Estonia with 24%, Latvia with 25%, and Lithuania with 33%, since they have adopted the flat tax
Briefly explain the statement "Fairness of taxation is increased when more kinds of wealth are included".
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).
Lee, Y., & Gordon, R. H. (2005). Tax structure and economic growth. Journal of Public Economics, 89(5-6), 1027-1043. http://dx.doi.org/10.1016/j.jpubeco.2004.07.002
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.
I know that one of the benefit of our current income tax system is those who make a lower income will have to pay a lower tax percentage from their earnings. However, the disadvantages with this method is quite obvious. According to the Internal Revenue Service (IRS), the charts show that it has six federal income tax brackets between 10 to 35 percent, which means that our progressive tax system affects hard working people with a higher tax rate (Freedomworks.org). For example, people who earned an income up to $8,400 would be under the 10% tax bracket, while people earning about $360,000 or more would fall under the 35% tax bracket (Rosen, Elizabeth). The taxpayers are broken down into groups based on their taxable income. The more a person earns, then the more taxes they will have to pay once they reach the different taxes bracket levels
(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
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
From 1890 to 1920 was labeled the Progressive Era and responded to the social problems that arose from the Industrial Revolution that was sweeping across America. This social movement changed into to a political one and corruption ran high throughout the governments and political parties. Corporate greed was astounding and was keeping the general society at poverty levels. The wealthy Americans used their wealth to live lifestyles of lavishness that was being created from the modernization of America, while the poor had to sleep in the alleys and beg for food. Men and women were being worked 12 to 16 hours a day and children labor was rampant with no laws in place to protect the children workers. The Progressive Era sought to eliminate these negative impacts to society create solid education systems and safe work environments. Social reform was seriously desired and the progressives were destined to change the way society in America was being established by the Tycoons such as Andrew Carnegie, John Rockefeller, and Cornelius Vanderbilt. Constitutional Amendments were added during the Progressive Era to create social change and correct the political interests of America. Woodrow Wilson views on the ‘literary theory’ of checks and balances is simply a consistent account of what our Constitution makers tried to do;” he stated, “and those checks
One person may see that the increase taxation on the poor and the decrease taxes on the wealthy is not an issue because the wealthy pay a lot of taxes already. However, many people don’t realize the fact that, yes, the wealthy are paying a lot of taxes because they make more money, but they can afford to pay more. Recently, in a CNN article, more than forty millionaires want their taxes to increase, which proves the fact that the wealthy have plenty of money to give back to the community. In addition, their just going to keep getting wealthier and wealthier by the
Aaron Hill from Education Portal suggests “ A progressive tax system really acts as a tool for redistributing income from the upper class to the lower and middle class. Those individuals who earn more pay more into the federal government. This helps keeps the income gap from growing wider between the rich and the poor.” Although this is what the government claims most of the money is just recirculated for the federal government to use as it’s own
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.
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.
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.
Tax money helps to ensure the roads you travel on are safe and well-maintained. Taxes fund public libraries and parks. Taxes are also used to fund many types of government programs that help the poor and less fortunate, as well as many schools (Wonderopolis, 2016).
Russia has a high crime rate also. Their crime rate is so high that if you were to go to the store like the grocery store, when you walk in the store u have to lock your things up in a locker and shop. When you got through shopping then you were to pick up your stuff out of your locker. The whole time that you are shopping there are people watching your every move. The reason why the crime rate is so high is because they work hard to get paid a little amount of money. Russia’s unemployment rate is very high. There are not enough jobs in Russia for everyone to have a job. For example if you were to get a job at a fast food restaurant, you were only getting paid a little or nothing an hour and that’s not even close to minuan wage in America.