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. To understand this compromise, there needs to be a basic understanding of the United States current tax code, more specifically in this situation the federal income tax code. The income tax makes up 46 percent of the federal governments three trillion dollar internal revenue, that is 1.38 trillion dollars (.N.p.).
Washngton: thomas.loc.gov. Q&A: US payroll tax cuts. (2011, Dec 22). Retrieved March 22, 2012, from BBC News (UK): www.bbc.co.uk/news/business-16287289 Regarding the Hearing on Expiring Medicare Provider Payment Policies. (2011, Sept 21).
Businesses also moved production abroad so products could be made cheaper than in America. Structural unemployment is more challenging to fix because it require matching of people’s skills they have been trained, higher education and progress. Structural is not a permanent problem, like seen during World War II the G.I. Bill was introduced turning around the stru... ... middle of paper ... ...n the recession is hard to understand is because the diverse actions that must take place to create a solution. We can’t just recycle the same policies like the New Deal again we must be able to adjust and fit it to today society.
n.p., n.d. Web. 2 March 2012. Puzzanghera, Jim and Kathleen Hennessey. “White House Unveils Corporate Tax Changes to Fix ‘Unfair’ System.” latimes.com.
1. Tax Cuts Caused Income Inequality Income inequality is a big problem in the United States because the top, wealthiest American saw huge increases in their incomes, which the rest had their incomes go down. Bottom people do not have the same amount of money and the opportunity to move up the social ladder as the rich people do. In order to reduce income inequality, the government needs to tax the rich people more, and give poor people more money and more social services - education, food subsidies, health care. Tax cuts are only benefiting the richest people, and will widen the inequality gap between the rich and the poor.
The lower classes are suffering as the upper classes continue to thrive, and this must be improved if the United States expects to be a global economic leader. The tax cuts for the wealthy have caused the great divide between classes to separate further, and tax increases for the wealthiest Americans will not only help to improve this income gap, but they can fund programs that will help the lower classes. In Oct... ... middle of paper ... ...late the economy have been proven ineffective, as they promote inequality between wealth classes. We can benefit everyone through these increased taxes, funding new programs and distributing wealth more equally among the population. The wealthy may disagree, but in a country increasingly divided by income, we may not have a choice.
Even as a tax of this type would expand the tax base, the repercussions to the taxpayers, the state budget, and the state economy would present hurdles too high to conquer. Missourians are facing a tough fiscal environment. They are enduring a slow economic recovery and attempting to overcome a nearly six percent rate of unemployment (DLIR, 2013). If a “Fair Tax” is implemented during this time of fiscal uncertainty, Missouri will be at risk of losing up to $1.5 billion in revenue while increasing its operating costs by $12.8 million (Schweich, 2011). It will also leave Missourians at risk of a reduction in personal funds available for expenditures and could cause a loss in state services.
Currently low-income families pay little or no taxes. These people with lower incomes will be the ones most affected by a flat tax system. Also, there are allowable deductions under our current income tax system that will not exist if we change to a flat tax system. Although the federal income tax has loopholes and currently helps low-income families, it needs to be replaced. Congress is currently... ... middle of paper ... ... J. Mitchell, "Flat Tax or Sales Tax?