Did you know that 44 percent of the people in America do not pay any income taxes? This is approximately 66 million out of 151 million that now pay no income taxes. From 1950-1990, the percentage of people that owed no money for federal income taxes and paid no federal income taxes was 22 percent. This has now doubled and is putting our economy and country at its breaking point. Our current tax system penalizes those that work and save money. People who pay no taxes still get to enjoy the benefits. "A revolutionary change in our tax system is fundamental to re-energizing the American economy and restoring the American dream." (Moore) The United States income tax should be replaced with a consumption tax such as the flat tax to make the tax system more efficient and simple.
Currently we have a federal income tax in the United States. This system began after the ratification and adoption of the Sixteenth Amendment of the Constitution. This amendment gave Congress the power to collect taxes. Our federal income tax is an inclusive tax. This means that we are taxed a certain percentage of the total money we earn. We are also taxed on monies made from investments and monies we inherit. Under our current federal income tax system, people pay taxes based on their total income. This helps those that don't work or make less. 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...
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... J. Mitchell, "Flat Tax or Sales Tax? A Win-Win Choice For America," Heritage Foundation Backgrounder No. 1134, August 14, 1997.
Daniel J. Mitchell, "577,951,692,634 Reasons…and Counting: Why a Flat Tax is Needed to Reform the IRS," Heritage Foundation Backgrounder No. 1107, February 19, 1997.
Moore, Stephen. "Replacing the Federal Income Tax." Cato Institute. 8 June 1995. 14 March 2011
Tomlinson, Shelly-Ann R. "A Consumption Tax versus a Federal Income Tax in the United States". University of Gerogia School of Law. 2007. 24 March 2011.
William W. Beach and Daniel J. Mitchell, "Worst Case Scenario: Flat Tax Would Boost Home Values by 7 percent or More," Heritage Foundation F.Y.I. No. 87, February 12, 1996.
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.
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.
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...
Mehan, C.. N.p.. Web. 19 Jan 2014. . . N.p.. Web. 6 Mar 2014. . Kirkland, Stephen D. "Should We Have A Flat Tax?." Business & Economic Review 49.1 (2002): 27.
I. You might have heard politicians in the news, talk about overhauling our tax system with a new fix-all idea, the flat-tax. This would simplify our overly complicated tax system and might seem appealing at first glance, however there are serious problems with it.
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.
Reid, John Phillip. Constitutional History of the American Revolution / the Authority to Tax. Madison, WI: Univ. of Wisconsin, 1987. 33. Print.
The United States tax system is in complete disarray. Republicans and Democrats agree that the current tax code is complex, unfair, and costly. The income tax system is so complex; the IRS publishes 480 tax forms and 280 forms to explain the 480 forms (Armey 1). The main reason the tax system is so complex is because of the special preferences such as deductions and tax credits. Complexity in the current tax system forces Americans to spend 5.4 billion hours complying with the tax code, which is more time than it takes to manufacture every car, truck and van produced in the United States (Armey 1). Time is not the only thing that is lost with the current tax system; Americans also lose great deal of money complying with the tax code. Resources that are currently wasted on record keeping, filing forms, learning the tax code, litigation, and tax avoidance. The cost of complying with the current tax code totals about $200 billion annually, or $700 for every man, woman, and child in America (Armey 1). The overwhelming consensus that the current tax system is inadequate has ignited the search for tax reform. There are numerous proposals for tax reform; one particular proposal brought forth by various conservatives is the idea of national flat rate income tax. The idea is to replace the current income tax with a single rate that everyone pays.
Texas is one of the seven states that have no state income tax. This means the state does not impose an additional state income taxes on someone’s earnings, but there is still a federal income tax. While many claim this is beneficial to all of Texas citizens and promotes population growth others find it disadvantaging. Their is many disadvantages and advantages to not having a state income tax.
... middle of paper ... ... “a poll tax by another name.” nytimes.
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.
Williams, R. (2009, April 22). The Numbers: What are the federal government's sources of revenue? Tax Policy Center. Retrieved from http://www.taxpolicycenter.org/briefing-book/background/numbers/revenue.cfm
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...
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 ...
Tax cuts are only benefiting the richest people, and will widen the inequality gap between the rich and the poor. A recent report from the Congressional Research Service states, “as the top tax rates a...