Progressive and regressive taxes have an impact on funding for programs in our society, including education. The differences between the two provide for a very controversial view of how school districts plan budgets. Real estate taxes, earned income and personal income taxes, sales tax, and lottery revenue are factors that make up these differences.
Progressive taxes increase as taxable base amounts increase. Progressive taxes have an effect on income and expenditures. The U.S. federal income is an example of progressive tax because the higher income a person has, the higher the tax bracket rate. This affects the rich. The higher their income the more they have to pay in taxes (Wikipedia)
Regressive taxes are the opposite of progressive taxes; regressive taxes that takes a larger percentage from low-income people than from high-income people. A regressive tax is generally a tax that is applied uniformly. This means that it hits lower-income individuals harder. Some examples include gas tax and cigarette tax. For example, if a person has $10 of their income and must pay $1 of tax on a package of cigarettes, this represents 10% of the person's income. However, if the person has $20 of income, this $1 tax only represents 5% of that person's income (Investopedia).
People are charged many types of taxes, which some are progressive and some are regressive such as property or real estate taxes. The property tax is based on the value of the property, and it is a regressive tax (Combs, 2010). Most of the revenue from this tax is used toward education in the state of Texas, and it is collected annually. Residential and Commercial properties are taxed. Second, there is the sales tax. In Texas, the state charges a sales tax of 6.25%, is...
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...t of Fort Bend in southeast Texas, the property tax is $1.30 per taxable asset value. This revenue makes up 52% of the budget for the district (Fort Bend ISD, 2010). A loss of even a little property tax revenue would hurt the district’s budget and affect the loss of many teaching jobs.
Works Cited
Fort Bend ISD Financial Budget. (2010, March 17). Retrieved from http://www.fortbendisd.com/finance/documents/2010_11%20Budget.pdf
Garner, C.W. (2004). Education Finance for School Leaders: Strategic Planning and Administration. Upper Saddle River, NJ: Pearson Education, Inc.
Kokernak, Louis. (2010). The Growth of Regressive Taxes. Retrieved from
http://ezinearticles.com/?The-Growth-of-Regressive-Taxes&id=3811425
Texas Lottery Supporting Education. (2010, March 17). Retrieved from http://www.txlottery.org/export/sites/default/Supporting_Education/
According to the data obtain from the United States Census Bureau; the state of Texas received the amount of $ 24,500,909 in sales tax revenue in the year 2012, Tennessee $6,512,352, and Utah $1,857,055. The sale tax in Texas percentage is “6.25 % to 8.25% depending on the local cities; Tennessee charges “7%, but the number can vary from 1% to 2.75 %”; Utah is “4.70% to 7.95%. Texas population is approximately 26,06 million; Utah 2,855 million, and Tennessee is 6,456 million by 2012; These numbers show that the state of Texas is bigger in size and population than Tennessee and Utah; however the sales taxes revenue is lower han Tennessee, but higher than Utah’s.
A state income tax is a small price to pay considering all the benefits it provides many citizens with. As a college student, I am trying to receive as much state money to fund my college career, and not having a state income tax is leaving less money to fund my education. With a high sales tax my school supplies end up being more expensive and with property taxes being so high, rent increases.”The Senate’s first crack at the budget calls for hundreds of millions of dollars of cuts for universities”(Watkins, Daniel, 2017).
In the United States, there are many different types of taxes. Some of them are goods and services, income, and property taxes (debt.org). The two most common taxes are the Flat Tax and the Fair Tax. Basically, Flax Tax is one income tax rate that everyone has to pay. Fair Tax is a proposal amendment to tax laws that removes the federal and state income taxes and replace it with a federal retail sale tax (Investorwords.com). Our current tax income system that we use is called Progressive Tax which is the tax system that takes a larger percentage from those who earn a higher income than those who earn a lower income (Investopedia.com). Out of all those taxes, the best one that I believe that can replace our current tax system is the Flat Tax because research has shown that it can be very beneficial for our economy today.
To reiterate, the current tax system is thought to be regressive because the tax system does not provide a balance for those with high income and those with low; however, this can be fixed by adopting some aspects of a state with progressive features. For instance, the state of California as a much better tax system than Texas because they have a “graduated personal income tax structure and provides personal income tax credits in place of personal and dependent exemptions” (“California”). If Texas adopted these two characteristics into their tax system this will began to progress because some of the faults in the present Texas tax system is the lack of personal income tax structure and it does not not provide tax credits to low-income taxpayers to offset other expenses. Making these few changes will help Texas greatly; however, making this change will be difficult because the state is comfortable with the tax system they have. Texas does not care to alter the tax system much because although it is weak, it does not take too much away from the overall economic success the state
In other words, Texas does not levy and individual income tax, instead the revenue is largely generated through property and sales taxes. Property taxes like your house, a place you own, or where your business is at, those are in some way ‘local taxes’ since the state is the one who is in charge of them. There are two type of taxes, progressive and regressive; the progressive taxes take a larger porcentage of income from taxpayers as their income rises (What is, web). Regressive taxes is the exact opposite, the tax is not based on ability to pay. Texas has one of the most regressive tax systems in the US, the reason? Because of their state taxes, where everyone pays the same tax rate regardless of their income. Inside Texas, however, the state’s tax system is not universally beloved. Although few are calling for Texas to impose its own income tax, the way the state employs property, sales and business taxes to finance services, particularly education, draws criticism and debate across the political spectrum (Batheja, web). Also, some critics say shifting away from income taxes and toward sale taxes puts a greater burden on poor people, who at the end would pay a higher percentage of their income to taxes that wealthy ones do(Dealer, web). In other words, the lower class is always the more affected by this type of taxes (regressive), because the way taxes
Then comes the education part, where according to the author Jonathan Kozol in his book Savage Inequalities Children in America’s schools, property tax is one of the main financial distributions that goes towards local schools. In Kozol’s book he quotes that, “typically in the United States, very poor communities place high priority on education, and they often tax themselves at higher rates than do the very affluent communities.
Local governments rely on property tax as a source of revenue to pay for school. Yet people in the urban areas pay the higher tax than suburban and wealthy communities, states on the other hand, relies on The Average Daily Attendance (ADA), which calculates state aid to school districts, tends to discriminate against urban school districts with high absentee rates by automatically, and excludes 15 percent of its student aid. Therefore, in many urban areas, the state ratio of funding remains significantly lower than 50 percent out of the tree entities the federal government allocates the least amount of funding. Residents in these areas who are under edu...
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
A decade of decline. (1993). Managing the federal government. 1-20. Dearborn, P. M. (1993, Summer). Local property taxes: Emerging trends. Internal governmental perspective 10-12 Taylor, A. (1996, May 25). Dole's call for gas tax repeal fails to spark voters Congressional quarterly report: Economics and finance. 1212 --1378. The economics of taxation. (1995, November 2). The economics of taxation. Suanders, L. (1995, June 19). Avoiding the rack Forbes, 13, 208.
Texas’ Political ideology centers on Republicanism and Conservatism. This political culture greatly reflects in the state’s taxing system. Texas runs on “laisse faire” motto, meaning that business should left alone. Generally, people with this political ideology do not desire any sort of government intervention (except when it comes to social issues)
The funding of public education has long been an issue for the state government of Texas. Starting before Texas was even a state, public education funding was at the forefront of politicians’ minds. In 1836, one of the reasons Anglo-Texans wanted to become independent from Mexico was Mexico’s lack of a public school system (An Overview of the History of Public Education in Texas, 2016). This drove the desire of President Mirabeau B. Lamar of the Republic of Texas to create legislation that would grant public schools land (A Brief History of Public Education, n.d.). This act set aside four leagues of land per county for the use of free education centers and thus began the funding of public education by the state government (An Overview of the History of Public Education in Texas, 2016). In the last 177 years, the Texas Legislature and the Texas Education Agency have created numerous acts and laws regarding the funding of education, but it has been in the last 50 years that this topic has become highly contested, resulting in several lawsuits and endless efforts (by the school districts) to equalize the distribution of funds to Texas school districts (Texas School Finance History, n.d.). In sum, the complex issues and policies that surround the funding of public education are derived from a combination of the legislature, bureaucratic agencies, and local governments in the form of school districts.
Having a lower tax rate the state can collect a greater amount of tax money and vice versa. California has an income personal tax which is progressive (Janiskee 101). On the contrary, Texas has a “low service, low tax” reputation with regressive tax system. Furthermore, Texas is one of the nine states that still do not have a personal income tax (Champagne, 314). California’s income tax is designed to match inflation rates in order not to push a taxpayer into higher rates (Janiskee 101). The most substansial single tax financing Texas government is sales tax. Today, the sales tax in Texas is 6.25 percent which automatically places Texas in the rank of states with highest sales tax rate. Moreover, city and county are allowed to impose additional 2 percent sales tax (Champagne 317). Likewise, California has 7.5 percent sales tax which considered being a high rate as well as in Texas. In addition to the income and sales tax...
The government does not fully provide funding for each school district since public schools are funded through property taxes (“Public”, 1). Therefore, the amount of money for education received by each district varies from one another; there is a minor probability of two school districts getting the exact amount of money. It is reported that districts with high numbers of low-income students receive fewer government dollars per pupil than districts with fewer low-income students (Brennan, 1).
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).
When it comes to federal taxes they mostly stay the same but the one tax that does change is state taxes. Some businesses look to the states with the lowest tax rate to open their business. When you have short-term investments, you will pay short-term capital gains tax and long-term investments you pay long-term capital gains. When the investments are held longer they tend to a lower rate. Business owners have to worry if politicians raise or cut the tax rate. If a business doesn’t know what their tax rate will be they tend not to expand or hire (Sherman, para