There are two things in life that are certain: death and taxes. In today's world, the majority of our government's income comes from taxation. A tax is not a voluntary payment or donation, but an enforced contribution imposed by government (Mikesell, 2011). Taxes are an amount of money collected from citizens, and they are used to provide public goods and services to benefit our communities. Taxes are amounts established in a political process of structured laws to determine how the collective cost of government services will be distributed among elements of the market economy. The two most important tax policies are the level of taxation, or how much taxes should be, and the structure of the system, or how revenue is to be raised (Mikesell, 2011). To better understand taxation and its purposes, this paper will discuss in detail the different tax structures- income taxes, sales taxes and property taxes and describe their advantages and disadvantages based on equity, economic effects, collectability, and transparency.
In the United States, taxes have been around even before the nation was founded. The criterion for taxes was proposed in a 1776 guide of taxation for a market-based economy by Adam Smith in the Wealth of Nations (Mikesell, 2011). During the Civil War, the government relied on excise taxes but they didn’t generate sufficient revenue, so the first income tax was enacted in 1861. By 1895, the tax was ruled unconstitutional by the Supreme Court, and in 1913 the 16th Amendment was passed which gave the United States the power to tax personal income and resolved the revenue problem (Mikesell, 2011). During the Great Depression in the 1930s, the government added unemployment compensation and social security progr...
... middle of paper ...
...l never be levied fairly because the world is turning into the “haves” and the “have-nots”.
Works Cited
Davidson, C. (2006, July 24). The history of taxes. In Yahoo Inc. Retrieved November 23, 2010, from http://www.associatedcontent.com/article/45350/the_history_of_taxes.html?cat=37
Ellis-Christensen, T. (2010, September 10). What is retail sales tax? In Wise Geek. Retrieved November 21, 2010, from http://www.wisegeek.com/what-is-retail-sales-tax.htm
Holetzky, S. (2010, September 26). What is property tax? In Wise Geek. Retrieved November 23, 2010, from http://www.wisegeek.com/what-is-property-tax.htm
Mikesell, J. (2011). Fiscal administration: Analysis and applications for the public sector (8th ed.). Boston
Pollick, M. (2010, August 2). What is income tax? In Wise Geek. Retrieved November 21, 2010, from http://www.wisegeek.com/what-is-income-tax.htm
Mikesell, J. L. (2010). Fiscal administration: Analysis and applications for the public sector (8th ed.: 2010 custom edition). Mason, OH: Cengage Learning
Our current system of taxation is a varied rate percentage 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 current system although bringing in over $3 trillion, taxes income multiple times, and includes the taxing of estate, labor, savings, and investments (National Priorities Project, 2013). The system itself is complex with over 20,000 pages of regulations, requiring a massive filing system, which is set up and maintained by an even larger IRS, requiring over $225 billion in compliance costs (Hall, 2001). One can be hard pressed to find an advantage in the current system, other than the fact that it provides the government with an enormous amount of funds, and it has...
...e, Maxime, and Giuseppe C. Ruggeri. "Flat Taxes And Distributional Justice." Review Of Social Economy 56.3 (1998): 277-294. Business Source Premier. Web. 19 Jan. 2014.
Khamsi, R. (2013, May 31) How Safe Is Recreational Marijuana. Scientific American. Retrieved from http://www.scientificamerican.com/article.cfm?id=how-safe-recreational-marijuana
What Was Jim Crow?. (n.d.). What was Jim Crow. Retrieved April 11, 2014, from http://www.ferris.edu/jimcrow/what.htm
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.
The use of taxes is one of the government's favorite ways to make its presence known in the economy. While this method seems blatantly obvious, many of the ways the government uses the money collected by taxation is not. Some of the money it takes is used to fund other programs designed to "protect" consumers and to "create" jobs. Be...
...dison, N. (2014, March 14). What is the Difference Between Schizophrenia and Multiple Personality Disorder? Retrieved from Wisegeek.com: http://www.wisegeek.org/what-is-the-difference-between-schizophrenia-and-multiple-personality-disorder.htm
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 ...
Pros and cons of condominium living. (2007, August 27). Retrieved March 29, 2014, from https://www.lendingtree.com/mortgage/pros-and-cons-of-condo-living-article
The "Benefits Of Authoritarian Parenting." Benefits Of Authoritarian Parenting? 25 Mar. 2014 http://benefitof.net/benefits-of-authoritarian-parenting/>. The Disadvantages of Strict Parenting. Everyday Life. 26 Mar. 2014 http://everydaylife.globalpost.com/disadvantages-strict-parenting-3790.html>.
The famous literature on principles of taxation was embodied in Adams Smith “Canons of taxation”. Since then, economies have adopted (and adapted where necessary) these basic principles for what is regarded as the most important tool of fiscal policy.
The government use of taxes plays a crucial role in today’s economy as well as personal finances, it has and will continue to leave its mark on the world we live in.
What is cyberbullying, exactly?. (n.d.). STOP cyberbullying: What is cyberbullying, exactly?. Retrieved April 28, 2014, from http://stopcyberbullying.org/what_is_cyberbullying_exactly.html
Currency Fluctuation, What is Currency Fluctuation, 2014. Available at: http://www.wisegeek.org/what-are-currency-fluctuations.htm Retrieved at 6th April 2014