It takes an average American 13 hours to file taxes. Why? Because there are 7 tax rates, 4 standard deductions and at least a dozen tax credits for individuals. Then, there are the exemption, the itemized deduction, and the special tax rules. What a complicated mess. Wouldn’t just be easier if we eliminated the 73, 954 pages of loopholes and simply taxed everyone using the same percentage? The current federal income tax system is progressive, which means the more you earn the higher percentages of taxes you pay. But it’s not that simple. For example, if you earn you earn $100,000 and are in the 28 percent tax bracket.You would owe 10 percent of $8,925, 15 percent of $27,325 (the difference between the top and the threshold of the second tax bracket), 25 percent of $51,600, and 28 percent of $12,150 (the difference between your income and the threshold of the third tax bracket). That calculation results in $21,293, a tax rate of 21.2 percent.
Having a flat tax would be so simple. No matter how much you earn, you would pay one rate for all your income. A pure flat fax would eliminate deduction and credits to further quicken tax filing and payment. Texas Governor Rick Perry say,” Taxes would become so simple that taxpayers would be able to complete their returns in minutes and submit them on a postcard.” Taxes would also be far more transparent. Transparency is needed so that taxpayers can easily understand the full extent of their tax burden. Together, simplicity and transparency provided greater confidence that taxpayers are not exploiting tax complexities to pay less tax or even no tax. Also, it means that citizens would have a clearer understanding of what they are paying for in exchange for the government serves they are rece...
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...g taxes would be so much easier, and the taxpayers would also be more willing to pay if they see what they are paying for in exchange for the government services that they are receiving. Having a flat tax would be fair and benefit everyone, making sure that everyone is chipping in to cover the cost of the government. Last of all, it will also stimulate the economic growth ensuring better opportunities, wages, and jobs for citizens in the future. Obviously having a flat tax would benefit everyone.
Works Cited
http://www.moneytalksnews.com/2014/02/11/a-flat-tax-the-good-the-bad-and-why-it-probably-wont-happen/ http://hubpages.com/hub/Flat-Tax-vs-Progressive-Tax-Pros-and-Cons-for-the-US http://blogs.wsj.com/wealth/2011/04/18/the-rise-of-the-hints-high-income-no-taxes/?mod=e2tw
http://www.heritage.org/research/reports/2011/12/the-new-flat-tax-easy-as-one-two-three
3. The Garners ' take-home pay is over $4,500 a month. Yet, after all expenses are paid, there is only a $220 surplus each month. Based on the information presented in this case, what expenses, if any, seem out of line and could be reduced to increase the surplus at the end of each month?
Whether or not to keep or discard the Bush era tax cuts for the wealthy, give tax breaks to the lowest tax bracket, and even throwing out the entire current tax code and replacing it with a simpler version, tax code and tax law has been a very controversial topic for the past few years. As it stands, the current tax code has over seventy two thousand pages, compared to the four hundred pages it had in 1913. There are many different stakeholders in this debate including taxpayers, corporations, businesses, etc. Americans for Tax Reform (ATR) is an organization that was “founded in 1985 by Grover Norquist at the request of President Reagan”(.N.p.). Their goal is to create and advocate for a simple flat tax,“...on the belief that they will provide a strong stimulus to investment, employment, and output” (Stokey 1). They promote their organization and represent taxpayers in all fifty states. Along with tax reform, ATR also advocates for individual health care, free trade, and spending transparency (.N.p.). Using very simple and easy to understand images, ATR is able to convey their goals and get information across to the general audience that visits their website.
The FairTax Act will replace these costly, oppressively complex and economically inefficient taxes with a progressive national retail sales tax, which would be levied on the final sale ...
However, I believe the Flat Rate would provide the best alternative, as it is the easiest to revert back to the original if necessary while eliminating a lot of the concerns that are raised about our current system such as equality, complexity, and cost efficiency. Works Cited Hall, A. (2001, August). The X-Men: The New York Times. The Flat Income Tax and the Fair Tax Consumption Tax: A Comparison of Federal Taxation Proposals. Retrieved from https://wilmu.blackboard.com/bbcswebdav/pid-4981484-dt-content-rid- 14738969_1/courses/POL.326.DIS.B2T01.FA2013/FlatTaxFairTaxComparison.pdf.
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. 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.
6. The flat tax replaces the current income tax code, which is very 7. complex, with a system so simple Americans could file their taxes on a 8. form the size of a postcard. What exactly is a flat tax? A flat tax sets 9. into place a single tax rate on all income subject to tax. The hundreds of 10. exemptions, credits, loopholes and deductions now in the tax system 11. would be eliminated to make the single tax rate as low as possible. The 12. cost of using the current tax system totals about $200 billion annually, 13. or $700 for every man, woman, and child in America. A flat tax would 14. reduce those totals by 94% , saving taxpayers more than $100
Many ponder the idea of federal taxes and whether the wealthy deserve to pay a higher percentage rate of their overall income. That is, they argue that because our society needs more equality and a lower national budget deficit, taxes on the rich must be raised. This specific topic has been discussed for decades, and due to the severely different perspectives, it is unclear whether the two sides will ever come to an agreement. President Barack Obama and much of the Democratic Party strongly lean towards raising taxes on the rich, while the conservatives and the Republican Party heavily lean towards a more balanced flat tax. However, after extensive research and focus on what would be best for the equality of individuals, the nation and its economy, this paper will firmly prove that the top one percent should not be taxed any more than they are today.
The best sources used was the chapter on taxes in the textbook Battleground: Government and Politics. This gave the most comprehensive overview on flat tax. The second best would be the article from George Mason’s Walter Williams because he clearly understands that it is a good idea; however, it will not pass. Even though a majority of the articles stated there was a problem with the current tax system, there was no plausible ways to fix it. Flat tax would not be used because it would remove tax deductions for things like mortgages, donations, educational expenses, etc. Additionally it would remove jobs from accountants as well as IRS agents whose job it is to enforce the tax code. Neither people, nor politicians would be willing to give up their tax deductions and for that reason the flat tax would not work. The current tax code is not a perfect system, but it is the best that we
1. The renewed job growth in the automobile industry in the United States is an effect of the use of two-tier wages. Two tier wages are pay structures that consist of different wages for old and new employees. Workers are getting paid at different rates. This happened to boost the job growth in the automobile industry significantly by providing a cost efficient pay scale for companies. Also, the labor cost of vehicles decreased, which knowingly helped companies. 100,000 people were employed in the late 1900s. The number was reduced to 550,000 during bankruptcies and the recession. The two tier wage helped stop this problem by increasing employment by a few hundred thousand.
This paper will take a close look at the concepts of the "flat tax," and look at the possible benefits and potential failings. Although there is a basic format to the flat tax, there are multiple flat tax proposals that have been offered by conservatives. Along with critiquing the basic format of the flat tax, this paper will compare an...
The Earned Income Tax Credit (EITC) is a program that was set in place, in 1975, to improve “the economic status of low-income persons […] granting nearly $40 billion to low-income households” (Borjas, 59). As is clear from the name of the program, The EITC is a program that provides tax credits to those who qualify, the EITC could even produce a negative tax liability for some households, in particular the type I will discuss, which would provide substantial income increases for these households. In order to qualify for the EITC, the recipients must be active members of the labor force, in that they must have labor income, and for the group that I will be focusing on, single mothers, total household income must be below $33,241 for single parents with one child and $37,783 for single parents with two or more children. According to Economist Hillary Hoynes, in a presentation given to the Chicago Federal Reserve Board in 2007, the maximum available credit for a single parent with 1 child was $2,853, with the maximum available credit for single parents with two or more children being $4,716. (Hoynes, 2007) The EITC has provided assistance to countless American families while still providing them with an incentive to remain in the labor force, unlike many other welfare programs. I will focus on a certain subset of people receiving the Earned Income Tax Credit: single-mothers.
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.
The way money is distributed within the United States is unbalanced, with the majority of the wealthy owning the bulk of the country’s wealth. Wealth can be defined as a person’s assets and monetary gains. This unequal distribution has caused numerous economic and geographical problems, such as how resources are divided among countries, how developed or industrialized a country is in relation to wealth distribution and the wide spread of disease and lack of medical attention due to an absence of money. In this paper I will address the negative and positive aspects associated with wealth distribution. I will explain how resource distribution contributes to an area’s economic growth. I will also discuss varying ways to measure wealth within and between countries and define and explain the three sectors of the economy. The United States has not seen such staggering figures between the wealthy and the poor since the great depression. In my opinion, many of our countries problems stem from the unequal distribution of wealth.
In conclusion, If this wealth tax is done fairly and logically then it would be a incredibly good solution to bridge the gap between the rich and the poor as well as creating a climate for social reconciliation and substantive equality.