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.
There are many reasons why I chose the Flax Tax as a better tax method than our current system. Basically, the Flax Tax is an income tax system in which everyone pays the same tax rate. Although, this
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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
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
Many debates have been waged over the decades on what will be taxed, on who shall be taxed and how taxes are collected. Since the 16th Amendment was ratified in 1913, the debate has intensified, centering on how high to make the income tax rate. Most Americans were not concerned since the Amendment was sold to them as something that would only affect corporations and the rich. With ever increasing fervor these corporations created lobbyists to convince Congress to exempt them from some or all of the income tax. The big breakthrough in this was taxing the worker directly with payroll taxes during World War II. This method of collecting income tax was sold to Americans as temporary, but Congress has extended it indefinitely and the public has become used to it. The next few decades saw the debate revolve around creating tax breaks for individuals in an attempt to modify behavior or spending. This has resulted in over 67,000 pages of tax code and an entire industry devoted to tax compliance and evasion, with the unintended behavioral change of corporations and the rich parking their money outside of the United States in small island nations to avoid taxation. These offshore accounts are estimated to hold $10 trillion dollars, a number approximate to the national debt. The FairTax Act should be enacted because it eliminates all federal income taxes for individuals and corporations, eliminates all federal payroll withholding taxes, abolishes estate and capital gains taxes and repeals the 16th Amendment; thus eliminating the need for offshore accounts.
“No taxation without representation!” A fair tax system was what the American colonists were looking for and one that many say we are still trying to achieve. Today, while we are all represented in government and are all required to pay taxes, some still perceive the system of taxation as unfair, allowing for specialized interests, loopholes, as well as more/less taxation based on income. 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?
Many of my thoughts throughout ethics have been towards the utilitarian side. This is where I would differ from that view. If I were to go by the utilitarian view it would be to tax the rich more than anyone. This money would then go to the poor where the money could be used up instead of sitting in a bank account. The utilitarian believes you do whatever it takes to make the most possible people happy. If you took the top five percent in America and taxed them more, then gave it to the bottom thirty percent, you have now helped more people then you did not help.
II. Implementing a flat tax without significantly increasing the deficit is impossible without shifting the burden from the rich to the middle-class, instead our current progressive tax policy needs to be changed so that it is simpler and does not allow corporations to abuse the tax loopholes.
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
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
The current tax policy in the United States is very confusing and it is very costly for our government to administer it. It is in the best interest of our country and its citizens to revise or replace our current tax policy.
Whether or not the United States government should adopt a flat tax system in place of its current progressive tax system has been a hotly debated topic for decades. A flat tax is a tax system which refers to a tax on household income that is the same amount for each household- regardless of income level. The United States currently implements a progressive tax system, meaning that high-income earners pay taxes at a higher rate than low-income earners. The two systems differ greatly in their objectives and methods of execution and typically cause a good deal of unrest amongst lawmakers and citizens alike.
Taxation has always been a major controversy. Just like any major corporation, the government is constantly looking to raise revenue. The easiest and fairest way to do this is by taxing the people. However, how the people will be taxed is always an issue.
“Advocates say that, with a flat tax, most people could figure their annual taxes on a simple postcard” (McGrath). That is how simple it is to do the flat tax. People don’t need to spend hundreds of dollars or reserve many hours to do their taxes; rather they can in a few minute have it completed. The Governor of Texas also said in 2011, “It simplifies the filing process, allowing taxpayers to complete their returns in minutes and submit them on a postcard. And it will save Americans up to $483 billion in annual compliance costs” (Perry). It would be legend if people could save $483 billion in just annual compliances only that it not even counting the growth effects that a flat tax would have on the
The FairTax is a consumption tax, that will replace the income tax and eliminate the need for the Internal Revenue Service or (IRS) for short. The FairTax would eliminate self-employment taxes, death taxes, capital-gains taxes, corporate taxes and a lot of others and replace complicated regulations with a simple easy to collect sales tax. The tax would cause GDP to grow because without an income tax people will have more money to spend and the increased spending would fuel economic growth. The FairTax bill also has a provision that will issue a monthly “prebate” to nullify the tax on basic necessities like food. There will no longer be individual tax returns only businesses will pay taxes to the government with the tax money consumers pay. The compliance costs for the FairTax will be lower because of fewer collection points making less...
...sion. When a police of taxation results in overall economic prosperity, the system is more effective because it benefits all of the taxpayers due to the improved economy. In addition, progressive taxation provides incentives for vital economic activities. The interest on home mortgage payments is a tax deductible on the personal income tax which encourages the purchasing of homes and provides aid to homeowners. Dependents, such as children, may reduce the level of taxation to support families across the United States. Said incentives would not be present in a flat tax because it requires all members of society pay the same percentage of their income regardless of socioeconomic standing. Progressive taxation is more effective because incentives help the individuals participate for important activities, while under a flat tax system, such incentives would not exist.
The purpose of this paper is to illustrate the layout of taxation. I will differentiate the types of taxes and the roles that they serve currently. Subsequently, I will explain what equity, efficiency, effectiveness and transparency (EEET) are and show how they apply to taxation as a whole. Lastly, I will conclude how the EEET applies to the four tax types.
Right now, citizens are taxed according to what they make, but only up to $70,000, which means the higher and lower classes are not being taxed proportionally. We argue that we should tax a percentage of the total income rather than income up to $70,000.