Flat tax - A fair tax system
The United States has been known as a promised land for freedom, opportunities, and equality. In particular, to pursue the utmost fairness, the US government has imposed a progressive tax system with the hope for income balance among citizens. Surprisingly, what the government believes is not similar to what the public thinks. While the progressive tax system has been widely applied, only 49% of the American population advocates this kind of tax (Gallup). The other half really raises the question about the effectiveness of the progressive tax and adds the heat to the debate over the implement of a more equitable taxation - a flat tax system.
Currently, with the progressive tax system in the US, all citizens have to pay the sum of tax according to their income, so the rich people with higher earnings encounter greater tax, and the poor suffer less. The progressive tax system includes many deduction and exemptions. For instance, dependents are eligible for tax personal exemptions; taxpayers can receive fixed amount of tax deduction for each child or dependents they support and so on which substantially complicates the progressive tax. The very complexity of the progressive tax leads people to the idea of a flat tax structure. A flat tax, by definition of Investopedia, is "a system that applies the same tax rate to every taxpayer regardless of income bracket." It does not depend on personal income to determine taxation. A flat tax concept stems from the Hall-Rabushka system developed in the early 1980s. The Hall-Rabushka system is called “flat tax” as it levies 19% tax on all businesses and makes deduction for wages, pension, contributions, capital investment, and marginal cost. Individuals also pay 19%...
... middle of paper ...
...YSTEM: Who Really Pays?" 2012. web. 20 July 2013. .
Novack, Janet. "Tax Waste: 6.1 Billion Hours Spent Complying With Federal Tax Code." Forbes (2011). web. 21 July 2013. .
Paulus, Alari, and Andreas Peichl. "Effects Of Flat Tax Reforms In Western Europe." Journal Of Policy Modeling 31.5 (2009): 620-636. Academic Search Premier. Web. 22 July 2013.
Plumer, Brad. "Here’s why 10.4 million American workers are still in poverty." The Washington post (2013). web. 20 July 2013. .
Ross, Tim. "UK facing middle-class brain drain as professionals seek better lives abroad." The Telegraph (2012). web. 20 July 2013. .
Scholz, John Karl. "Tax policy and the working poor: The Earned Income Tax Credit." University of Wisconsin-Madison, 1994. web. 20 July 2013. .
Federman, M. et al. What Does it Mean to be Poor in America? 1996 (2009). Pp. 296-310
Stone, Chad, Danilo Trisi, Arloc Sherman, and William Chen. "Center on Budget and Policy Priorities." A Guide to Statistics on Historical Trends in Income Inequality. Center on Budget and Policy Priorities, 6 Nov. 2013. Web. 03 Dec. 2013. .
In The Working Poor: Invisible in America, David K. Shipler describes the lives of United States citizens who live within poverty. He highlights the U.S.’s disregard for its working poor, the nature of poverty, and the causes of poverty faced by low-wage earners. Shipler performs an amazing job of describing the factors that play their parts into the lives of U.S. citizens who live in poverty and are in poverty. Shipler explains the effects of tax payments and refunds, the abuse of the poor by private and public institutions, the spending habits of the working poor, the culture of the U.S., and the presence of money as a factor in the lives of the working poor. In dealing with government bureaucracy or private business, the working poor are vulnerable to the abuse of con-artists, employers, financial service providers, and public service providers.
1. According to the study”Simulating a Flat Tax Model: What Are the Likely Outcomes?” conducted by accountant Brita Boudreau and professor Thomas M Dalton, any flat tax that could generate the same amount of revenue as our current system would inevitability force the middle-class to shoulder extra taxes(2013).
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.
Zuberi, Dan. Differences that Matter: Social Policy and the Working Poor in the United. New York: Cornell University Press, 2006.
After substantial decreases in the 1990s, poverty rates stopped their decline in 2000 and have actually started to again creep upward. The great conundrum of how one simultaneously alleviates the multiple causes of poverty has become a central obstacle to poverty reduction. Into this debate comes author David Shipler, a former New York Times Pulitzer Prize winner, with an aptly titled look at the state of poverty in America today, The Working Poor. Shipler's book is more anecdotal and descriptive than analytical and prescriptive. Yet it is a valuable portrait of poverty in America, just as Michael Harrington's landmark book, The Other America, was in 1962. While he does not offer many concrete solutions, Shipler provides readers with an intimate glimpse of the plight of the working poor, whose lives are in sharp contrast to the images of excess w...
Wilhelm, Heather “The Great Income Inequality Sham” Real Clear Politics. May 2013. Web. 29 Apr 2014.
“Rising Poverty, Widespread Unemployment: America’s Economic Pain Brings Hunger Pangs.” Global Research. N.p., n.d. Web. 6 Dec. 2013.< http://www.globalreasearch.ca/rising-poverty-widespread-unemployment-america-s-economic-plan-brings-hunger-pangs>.
Pennington, Maura. “ To Fix Income Inequality, The Have-Nots Must Become The Do-Somethings.” Forbes. Forbes Inc., 08 March 2013. Web. 06 April 2014. .
Wicks-Lim, Jeannette. “The Working Poor.” New Labor Forum (Murphy Institute). 21.3 (2012): 17-25. Academic Search Complete. Web. 18 Oct. 2013.
In The Working Poor: Invisible in America, David K. Shipler tells the story of a handful of people he has interviewed and followed through their struggles with poverty over the course of six years. David Shipler is an accomplished writer and consultant on social issues. His knowledge, experience, and extensive field work is authoritative and trustworthy. Shipler describes a vicious cycle of low paying jobs, health issues, abuse, addiction, and other factors that all combine to create a mountain of adversity that is virtually impossible to overcome. The American dream and promise of prosperity through hard work fails to deliver to the 35 million people in America who make up the working poor. Since there is neither one problem nor one solution to poverty, Shipler connects all of the issues together to show how they escalate each other. Poor children are abused, drugs and gangs run rampant in the poor neighborhoods, low wage dead end jobs, immigrants are exploited, high interest loans and credit cards entice people in times of crisis and unhealthy diets and lack of health care cause a multitude of problems. The only way that we can begin to see positive change is through a community approach joining the poverty stricken individuals, community, businesses, and government to band together to make a commitment to improve all areas that need help.
Sutter, John. “What is income inequality, anyway?” CNN. 29 Oct. 2013. Web. 13 Feb. 2014.
The flat tax will make taxes fair for all people. No matter what race a person is, what social class a person is in, or who they’re friends with, they will end up paying the same rate. Every single taxpayer will have to sacrifice just as much of his or her life as the next person down the road. One of the three main reasons for taxes is to maintain fairness. This is most reasonable ways to maintain fairness. The wealthy will still be paying more money than the poor person, but they both have the same tax burden.
Tax reform has undergone much debate in the political stratosphere recently. The tax system has been stigmatized because of a multitude of reasons that include corruption. Additionally, tax reform is a very complex issue. In addition, there has been an abundance of negotiations in Congress to pass some type of tax reform. Despite these talks, actual action has remained stagnant. This topic clearly reflects the collective action principle and the policy principle due to failed tax reform negotiations and the outcomes of various legislation.