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.
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 ...
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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...
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The constitution for Missouri and the United States share many ideologies. One of these similarities is the right of the government to tax its people. Taxing is when part of someone’s purchase or income, is taken away from the government so they can provide and afford services for the people. In the sixteenth amendment, passed in 1909 it states: “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration” (US Constitution). This essentially means that the United States government has the power to collect money from a person’s income. As well as being able to collect it there is also the power to implement the
Batheja, Aman. GOP Taxonomy: The Flat Taxers and The Fair axers. N.p.: Texas Tribune, 2015. Web. 22 Sept.
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.
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Income tax is one form of tax paid by those in the labor force to the government. There are different types of taxes that governments can use when asking for money from the public: regressive, proportional, progressive, and lump sum. A regressive tax is when taxpayers in the lower-income bracket pay a higher fraction of their income than high-income taxpayer. A proportional tax is when everybody pays the same flat rate, regardless of his or her amount of income. A progressive tax is when higher-income taxpayers pay a higher fraction of their income than lower-income taxpayers do. A lump-sum tax is similar to proportional where everyone pays the same, but in this case it is the dollar amount; everyone pays the same dollar amount in taxes regardless of their amount of income. Progressive tax is commonly used in a majority of countries around the world, including the United States in regards of their income tax.
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Efficiency is concerned with the optimal production and allocation of resources given existing factors of production while equity is concerned with how resources are distributed throughout society (Pettinger, 2010). The equity-efficiency trade-off is an economic situation in which there is a perceived tradeoff between the equity and efficiency of a given economy. This tradeoff is commonly viewed within the context of the production possibility frontier, where any additional gains in production efficiency must be offset by a reduction in the economy 's equity. Within this equity and efficiency tradeoff, equity refers to the economy 's financial capital, while efficiency refers to the future efficiency in the production of goods and services. This theory asserts that, in order for a nation to
Stiglitz, Joseph. Economics of the Public Sector, 3rd edition. New York: Norton & Co., 2000.Print
Taxation is a compulsory levy imposed on the income, value of goods and services of individuals, partners and companies by the government. It is can be said to be an approach of imposing tax on the citizen. This imposition of tax, is expected to yield income which should be utilized in the provision of both basic and substantial infrastructural amenities, both social and security, as well as creates conditions for the economic well-being of the society at large.
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