Three different tax plans: Proportional, Progressive & Regressive
Taxes are necessary for every citizen or resident of the United States, not all people agree to pay taxes and the government takes a portion of each person's income. Citizens have to pay taxes they receive necessary services for everyday life such as bookstores, medicine, police, firemen and parks. Even so all these services are given by the government for all people and families pay their taxes there is a difference when paying taxes according to how high the income is. Its a difference percentage between poor, and middle class while rich people. In addition to the article "High-income Americans pay more income taxes, but enough to be 'fair'?" just over half 54% of Americans
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Taxes can be distinguished by the effect they have on the distribution of income and wealth.
A proportional tax or city income tax, imposes the same percentage rate of taxation on everyone, regardless of income. If the income tax rate is 20 percent, an individual with $10,000 in taxable income pays $2,000 in taxes. A person with $100,000 in taxable income pays $20,000, in other words, where tax liability and income grow in equal proportion. For example, income of $10,000, people get $97.50 or 0.975% of income while income of $100,000 people get $975,00 or 0.975% of income.
A progressive tax or federal income tax is a tax that imposes a higher percentage rate of taxation on higher incomes than on lower ones. Also its characterized by a more than proportional rise in the tax liability relative to the increase in income, and a regressive tax is characterized by a less than proportional rise in the relative burden. Thus, progressive taxes are seen as reducing inequalities in income distribution, whereas regressive taxes can have the effect of increasing these inequalities. For example, income of $10,000, people get $1,000 in taxes or 10% of total income while income of $100,000 people get $25,000 in taxes or 25% of total
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Proportional is city income tax, as income goes up, the percentage of income paid in taxes stays the same. Progressive is federal income tax, as income goes up, the percentage of income paid in taxes goes up. Regressive is state sales tax, as income goes up, the percentage of income paid in taxes goes down. No matter how this types apply to american and residents people during they have to pay taxes. People are not in total disagree when paying taxes is talking about and they already know real process of taxes. Although tax process is different base in people's income, so that in the article ¨High-income Americans pay most income taxes, but enough to be ‘fair’?¨ demonstrates individual income tax statistics by income group, less than $15,000 gross income 24.3% of returns filled and 0.1% of income tax paid. $50,000 to $99,999 the 21.7% of returns filled and 14.9% of income tax paid. $250,000 and above gross income 2.7% of returns filed and 51.6% of income tax
The “Fairness of Taxation or Wealth Tax” is where taxes are calculated by the net worth of the person or the couple (household). This would be hard for tax collectors to determine each and every component of net worth of a person.
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).
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
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.
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
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
“Strong support for a flat tax extends across income groups (62 percent) among those making less than $30,000 a year and 73 percent among those making more than $110,000 a year”(2014 Reason Foundation). According to most websites and commentary blogs they say that a majority of supporters for the flat tax would be from higher income homes.But as shown in the quote not only would higher income homes support it ,but more than half of the 30,000 and below homes would also support.So not only do we need the flat tax but the citizens want a flat tax,give them what they want.The public can also agree that it is not the government’s responsiblities to reduce the differences in income between people with high incomes and those with low incomes,therefore calling for a flat tax to replace our own progressive tax.Even a little more than half(52%) of Democrats asked if they would agree with a flat a tax ,Democrats are also most likely to appose a flat tax becasue they believe in taxing the rich more than the
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.
Many presidents have different ways to tax the people. Tax policies are the government's choice to enforce who and how much they have to pay for their taxes every year. The presidents can determine what percent they can pay by how much they make a year. George Bush and Ronald Reagan had tax policies that could have different and some may have been the same.
A progressive tax policy requires individuals with higher incomes and wealth to pay taxes at a rate that is higher than those with lower
Everyone is France that is classified as “middle-class” pays the same tax, no matter what if their income is on the lower or higher end, promoting social equality within a certain tax bracket. However, the part of their system that is undemocratic is that the rich pay a much higher percent of their income, and people that have very low income do not pay income tax. The United States’ system is similar on the latter, but they have more broken down tax brackets that have the lower part of “middle class” citizens pay a lower percentage than the higher
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 ...
Tax rate refers to the percentage of the tax base, which is settled in tax. It is the tax charged by the government on a taxpayer’s income.