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).
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.
What is the Common Good for All Americans? What was the common good for all Americans in 1776? Thomas Paine, a political activist during America’s struggle for independence from England, argues in Common Sense, a pamphlet published in the Pennsylvania Magazine, with the American colonists, demanding a revolt against the British crown (Thomas Paine). He passionately believes that the answer to the “.benefit of all people in [American] society” (Thomas Paine) will result from the freedom of oppression for the thirteen American colonies. Common Sense, “the most incendiary and popular pamphlet of the entire revolutionary era”, remains noted by historians as one of the most influential pieces of literature during the era of the American Revolution that opened the gates to the ratification of the Declaration of Independence that 56 delegates signed on July 4, 1776, granting America’s freedoms from England (Thomas Paine).
“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?
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.
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.
Ability to-pay system, implying that the individuals with more money tend to pay taxes at a higher rate and the individuals who have less money tend to pay taxes at a lower rate or even get citizen supported advantages while paying no duties by any stretch of the imagination. Another option is a flat tax system in which everybody pays the same expense independent of pay. An example of benefits received rule, if a citizen bought a ticket worth $500 for non-profit fundraising and in turn received a dinner worth $100, he could only claim a tax reduction of
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.
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 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 ...
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.
The government use of taxes plays a crucial role in today’s economy as well as personal finances, it has and will continue to leave its mark on the world we live in.