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The National Debt Problem
Cons of flat tax
The National Debt Problem
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The national debt is growing and the government is unable to keep up under the current Progressive tax system, in the United States. A solution for the United States debt is to switch to a flat tax system. A switch to a flat tax system would simplify the tax process, it would make taxes fair and even, and it would allow the government to reduce the United States national debt. A flat tax system is a system that taxes every individual at the same percentage. It is not like any system the United States has seen before.
US Tax History
In the late eighteenth and early nineteenth century, the US taxed a few commodities to raise revenue for the federal government. By 1817, the Government removed all taxes and solely relied on tariffs of imported goods. The United States enacted its first modern tax to support the Civil War; the tax was a progressive tax on income. With the first income tax came the Commissioner of the Internal Revenue Service. The Government declared the tax on income un-constitutional and then replaced it with a tax on commodities. Then in 1916, the 16th amendment legalized taxation of income. Later during World War II, the government began withholding wages to collect taxes to support the war effort. Tax Reform Act of 1986 lowered the top tax rates. The Revenue Reconciliation Act of 1990 then increased the tax rate on the rich. “President Clinton signed the Revenue Reconciliation Act of 1993 into law,” (History of the Income Tax, 2007). This provided tax cuts on capital gains, and it gave a child tax credit and an education incentive. President Bush then signed tax cuts that were incremental. The incremental tax cuts reduced some of the top percentages and made middle income from couples the same m...
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...April 30, 2011, from http://www.heritage.org/Research/Commentary/2003/03/Russias-Flat-Tax-Miracle
Roach, B. (2003, October). Progressive and Regressive Taxation in the United States: Who’s Really Paying (and Not Paying) their Fair Share?. Tufts GDAE Publications. Retrieved April 27, 2011, from ase.tufts.edu/gdae/pubs/wp/03-10-tax_incidence.pdf
Russia to see 20-25 pct loan growth in 2011-cbank| Reuters. (2010, November 24). Business & Financial News, Breaking US & International News | Reuters.com. Retrieved April 30, 2011, from http://www.reuters.com/article/2010/11/24/russia-cbank-loans-idUSLDE6AN1YL20101124
SOI Tax Stats - Personnel Summary, by Employment Status, Budget Activity, and Selected Type of Personnel - Databook Table 30. (2011, March 14). Internal Revenue Service. Retrieved April 26, 2011, from http://www.irs.gov/taxstats/article/0,,id=207735,00.html
Office of Management and Budget. (2011). Budget of the United States Government: Fiscal Year 2012. Retrieved from http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/veterans.pdf
Sixteenth Amendment- Authorization of an Income Tax – Progressives thought this would slow down the rising wealth of the richest Americans by using a sliding or progressive scale where the wealthier would pay more into the system. In 1907, Roosevelt supported the tax but it took two years until his Successor, Taft endorsed the constitutional amendment for the tax. The Sixteenth Amendment was finally ratified by the states in 1913. The origin of the income tax came William J Bryan in 1894 to help redistribute wealth and then from Roosevelt and his dedication to reform of corporations. I agree with an income tax to pay for all of our government systems and departments, but I believe there was a misfire with “redistributing wealth.” The redistribution is seen in welfare systems whereby individuals receive money to live. This is meant to be a temporary assistance, but sadly, most that are in the system are stuck due to lack of assistance in learning how to escape poverty. There are a lot of government funded programs, but there is no general help system to help lift people up and stay up, so there continues a cycle of
Immediately after being sworn into office, Reagan implemented the first of many tax cuts. The Economic Recovery Tax Act passed in 1981 took 20% off taxes from top income levels and 25% off taxes from all lower income levels. Additional tax cuts, enforced in 1986, lowered taxes for those with high incomes by another 28% and those with lower incomes by 15%. These cuts were enacted based on the principle that tax breaks for the upper echelon of society would encourage investment and spending, creating new jobs for lower income individuals. Though these acts helped America during an economic low, they had consequences which are still being felt today. During Reagan’s presidency the distribution of wealth shifted unfairly towards individuals...
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.
(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
"Summary." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, 8 Jan. 2014. Web. 11 Mar. 2014.
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.
"Bureau of Labor Statistics Data." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, n.d. Web. 04 July 2017.
Tax season is upon us and many Americans are scrambling around trying to get theirs finished by the end of the dead line. This time of year is not a joyous occasion, everyone on edge most of them pondering how much they will have to pay. While others are wondering if they will get as much as they thought they will, or are they going to be one of the unlucky few to be audited? I am one of those people, anxious, and waiting at the edge of my seat for that hammer of reality to come crashing down over my head. With each new election year comes new arguments and battles fought within the halls of Capital Hill, but who is right and is there a middle ground? I will present you with the facts as I have found them; the choice is yours to determine what is right and what is wrong.
"Labor Force Statistics." Bureau of Labor Statistics Data. N.p., n.d. Web. 21 Sept. 2012. .
U.S. Office of Management and Budget. (2011). Table 11.3—Outlays for Payments for Individuals by Category and Major Program: 1940–2016. Washingon D.C.: White House Retrieved from http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist11z3.xls.
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.
Employment status of the civilian noninstitutional population by age, sex, and race. (n.d.). U.S. Bureau of Labor Statistics. Retrieved February 2, 2014, from http://www.bls.gov/cps/cpsaat03.htm
Entin, Stephen. J. (2004). Tax Incidence, Tax Burden, and Tax Shifting: Who really pays the tax? Retrieved January 24, 2008 from http://www.heritage.org/research/taxes/cda04-12.cfm
"Summary." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, n.d. Web. 03 Feb. 2014.