...Flat Tax Rate Memo To: From: Date: Re: Benefits/burdens of implementing a “Flat Tax” From the U.S. Federal Government to each individual taxpayer in America, everyone cares about how tax is being paid. In this memo, we will discuss the benefits and the burdens of implementing a “flat tax”. The current U.S. tax system is complex. IRS has six federal income tax brackets ranging from 10 to 35 percent. This progressive tax system punishes the most productive members of society with a higher tax rate. Some scholars, such as Dan Mitchell, argue that, “From an economic perspective, the flat tax and the national sales tax (or fair tax) are virtually identical. Both would junk the current system. Both would restore fairness by taxing at one low rate. Both would eliminate all forms of double taxation.” A flat tax is a single rate that spans all income brackets of taxpayers, rather than the current “progressive” system, which taxes higher-income individuals at increased rates and includes numerous deductions and exemptions. From the article Ramifications of a Flat Tax—Shifting the Burden to the Middle Class, the author states that, because many taxpayers believe the current tax system is not good enough, it needs to be changed. Therefore, the article introduces two flat tax systems to replace the current tax system, one is the Forbes’ Plan and another one is the Hall and Rabushka Plan. The models of these two plans are as follow: 1. Forbes Simulation Model Tax...
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...many countries applied the system of progressive income tax, which was earlier applied in Western Europe. But it soon turned out to be a system that discouraged economic growth. Therefore, some of these countries since 1994 have established the system of flat tax. Flat tax implies the application of a single-level tax system. Flat tax is applied in consideration of the supposition that all income should be taxed only once during their circulation, precisely when they are owned. Flat tax system refers to the unification of taxes in two taxing plans: personal income tax, which is levied on the total income of the individual and corporate tax, which is levied on the profits made by the companies. Flat tax was firstly applied in Albania during 2008 after two years of debates. The tax refers to the application of a 10% levied on the profit or on the total personal income. Keywords, flat tax, progressive tax, rates taxes, tax system in Albania, the consequences of taxation The notion of taxation has been known since the establishment of states. A social organization, as primitive as it may be, requires sufficient financial means to accomplish its goals. Taxes are a substantial means of providing the financial resources of a country. They occupy the leading place in the public income of modern countries. The great part of our neighboring countries and countries with quite a similar economic situation as ours are applying flat tax. So as to improve the economic situation and the fiscal...
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...The system of tax that a country chooses has a lot of effects on both its citizens and the economy as a whole. Most countries have adopted a progressive tax system, whereby they tax different classes of people different percentages of their wages. For example, the system might tax high-income earners, middle-income earners, and low-income earners at 30%, 15%, and 10% of their earnings respectively. Over time in the U.S and other major countries, some macroeconomics analysts have been proposing the replacement of the current progressive tax system with a flat tax system. Here, the household income will be taxed at a uniform rate, regardless of the level of income (Hall, & Rabushka, 2007). Hall claims that this system is of benefit to everyone,...
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...Is it Time for a Flat Tax? Flat tax is defined as an income tax system in which everyone pays the same tax rate no matter his or her income. In 1913, the United States established an income tax to raise money for the government. In our current system, income tax is applied to various parties. Individuals, companies, corporations, an almost every entity that produces an income gets taxed. However, partnerships are not taxed. To calculate the taxable income, allowable deductions are subtracted from the total income. There are specific rules and guidelines for income taxation depending on the person or entity filing. For example, someone with a higher income is going to be taxed at a higher rate than someone with a lower income. Taxpayers generally self assess their income tax by filing tax returns to the IRS. Currently, filing for income tax requires, lengthy instructions, record, keeping, forms, worksheets and schedules. With all these necessities, it causes headaches for the taxpayers involved. This also does not include Social security taxes and Medicare taxes, which just keep adding to the money the filer has to pay and the costs that it takes to have an individual calculate everything to get to the gross income. One may ask how do we get rid of the headaches while still maintaining the income level for the United States government? One idea is establishing a flat tax rate for everyone. A flat tax is an income tax rate that everyone pays the same tax percentage across...
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...federal income taxation should be replaced by a flat rate income tax. Speeches and Time Limits Speaker 1 (Team A, 1st speaker ).........................4 min. AFFIRMATIVE (PRO-FLAT TAX) SPEECH - Alastair Pearson: In the words of Adam Smith, the intellectual godfather of modern economics and classical liberalism: “No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.” My task today is to prove that the best interests of the overwhelming majority of the American public are served by the imposition of a flat, or proportional, tax – which I define as a solitary income tax with one percentage for the entire tax base, beginning at a minimum income threshold and with deductions for basic necessities (as in Canada, Australia, EU) and exceptions for the taxation of municipal bonds, fire, sickness and accident victims, and charitable and non-profitable organizations. This is in opposition to regressive taxes, which adversely affect the poor, and progressive taxes, which I define as taxes that redistribute wealth towards lower tax brackets. Progressive taxes undermine fundamental democratic values and discourage growth while promoting inefficiency and tax evasion, all by hiking rates arbitrarily on certain subgroups and protecting special interest groups beneath a tortuously complex facade. In 2013, Forbes reported the US tax code has exceeded 4 million words, while the tax preparation industry uselessly employs 800,000...
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...A flat tax system is better than progressive tax. 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 . A flat tax would be a certain percent of gross income to be paid by all. Individuals or businesses would pay the same percentage regardless of income, with no deductions. But that would be just as illegal as the system we have now. There is no law allowing the government to collect an income tax. On the other side, A progressive tax is a tax which increases as a percentage of one's wealth. Using the federal income tax as an example, a person who makes between $0-$7,500 pays no taxes, any income between $7501 and $30,650 is taxed at 15%, up to any income above $336,551 being taxed at35%. A progressive tax differs from what people call "regressive" taxes, like sales tax, which takes a larger percentage of money from individuals with less money .First of all, Progressive taxation is widely supported by experts in economics and political science from many different theoretical camps; in the United States and Europe, the majority of authorities supports a progressive tax and advance many arguments for it. For example, they say that progressive tax gives a government more revenue while also enhancing opportunity for its lower and middle class citizens. Without progressive taxes...
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...progressive income tax system requires a complete overhaul into a flat tax structure. Efficiency throughout all related markets would increase, reducing distortions, and creating greater than ever incentives to work and create capitalist opportunities. It also presents the potential of solving our country’s budget deficit issues. Our current system stymies innovation and the desire to persevere by forcing a higher tax bracket on those who earn more, causing more individuals to pursue avenues of evading taxation, either through legal or illegal means. Even though the flat tax appears as too burdensome to the poor – or as a contributing factor towards the establishment of a “black market” - a flat tax is simply a more equitable system that will solve the federal deficit issues in the United States. Efficiency would rise from five sources. The first is a change of the tax base from income to consumption. The second is the establishment of a more comprehensive tax base, which eliminates the differential tax treatment of various assets and forms of income. The third is the lowering of tax rates, which raises the rate of return to working, saving, and investing. It also reduces incentives to avoid or evade taxes. Next is the reduction of compliance costs , allowing companies to lower their budgets for record keeping return filing, the salaries and training of employees performing these tasks and the costs to obtain the advice of external accountants and tax lawyers. With...
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...Progressive Tax vs. Flat Tax The United States economy, as known by all, is not in its best shape. One way in which the government gains money is by imposing taxes on people. There are many taxes that are placed on different things that everyone needs or already has. The United States uses a taxation system which is criticized by many. The system used in Progressive Tax; however, many people believe the system of Flat Tax, or Proportional Tax, should be the system that is used for taxing. In a Progressive Tax system, a larger percentage of income is taken from those who are wealthy or have a large annual income, in taxes. Those who have low incomes do not have as high tax percentage to pay because progressive tax is based on ability to pay. For example, with progressive tax, people with the lowest incomes will pay 10% in taxes, those with the largest incomes would pay about 30%, and the middle class would pay somewhere in the middle. Flat tax is another way to say proportional tax and a Flat Tax system is a system in which the same percentage of income is taken from everyone. This means that no matter how much of an annual income you make, whether it be $20,000 or $200,000, everyone pays the same amount in taxes. Some people favor Progressive Tax, and others prefer a Flat Tax system. Both systems have their disadvantages and advantages. A Progressive Tax system gives the idea that everything is fair because everyone pays according to how much they...
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...Disadvantages of a Flat Tax System Polarization. Even though a flat tax system seems to be simple comparing with current tax system, there are still some disadvantages with this simplified tax system. A flat tax system could hurt low-income residents in some areas. From those low-income people’s perspective, flat taxes mean that they would pay more taxes than those rich people because they have less income to spend. Under current tax system, the policy makers believe that it is fair for those rich people to pay higher tax rate because they could bear it. While under the flat tax system, both high-income and low-income level residents would pay the same tax rate. Laura-Liana and Carmen indicate in their journal that this would be harmful for the society because flat tax system would hurt the society principle which is that higher income residents should help those people with lower income (Laura-Liana & Carmen, 2009). A flat tax system would leave more wealth to those rich people because of their high income and same tax rate and it would increase the speed for the polarization of wealth. Polarization of wealth happens when the rich people in the community become richer while poor residents become poorer. This would cause...
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...Should We Switch to Flat Tax? In general, all over the world more than ninety percent of government’s income comprises taxes collected from the public and corporations. American economy is concerned; it is the largest economy in the world. Government collects taxes directly and indirectly from individuals and corporations. Government is not a business entity but the regulating authority of the country. Therefore, government needs to fulfill needs and wants of people through economic activities, regulating the country towards the economic growth. The government frequently changes the economic policies to run the country in an acceptable level. Therefore, taxes are the main weapon used to control the country. American taxation policy for more than decades is progressive. i.e., those who earn more income should have to pay more taxes. This is the main tax policy has been used in America, but tax rate is increasing at the end. Economists and politicians speak about a new topic i.e., flat tax revolution. What is this new tax? That is according to Sexon, “a tax that charges all income earners the same percentage of their income” (240). However, in practice, this is not a new theory; many countries have already been implementing flat tax as the government tax policy. The flat tax system operates well in many countries. Hong Kong introduced this flat tax system sixty years back and Eastern European countries have been using flat tax since the early nineteen eighties. The ...
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...Sarathchandra Should We Switch to Flat Tax? In general, all over the world more than ninety percent of government’s income comprises taxes collected from the public and corporations. American economy is concerned; it is the largest economy in the world. Government collects taxes directly and indirectly from individuals and corporations. Government is not a business entity but the regulating authority of the country. Therefore, government needs to fulfill needs and wants of people through economic activities, regulating the country towards the economic growth. The government frequently changes the economic policies to run the country in an acceptable level. Therefore, taxes are the main weapon used to control the country. American taxation policy for more than decades is progressive. i.e., those who earn more income should have to pay more taxes. This is the main tax policy has been used in America, but tax rate is increasing at the end. Economists and politicians speak about a new topic i.e., flat tax revolution. What is this new tax? That is according to Sexon, “a tax that charges all income earners the same percentage of their income” (240). However, in practice, this is not a new theory; many countries have already been implementing flat tax as the government tax policy. The flat tax system operates well in many countries. Hong Kong introduced this flat tax system sixty years back and Eastern European countries have been using flat tax since the early nineteen eighties....
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...Should The United States Have a Flat Tax? The tax code in America is not only very complex, but most people outside of persons who has received specialized training do not understand taxes, forms, deductions, and various other aspects of the tax code. Not only is it hard to understand, but the time it takes to fill out various tax forms, and understanding the forms without the help of a person that knows all of the deductions and loopholes is almost impossible. Some people have taxes that are more complex than others are. Some may have to seek a professional and some may have the luxury of filling out the 1040EZ form, depending on assets, such as owning a business. The whole process of having to file taxes can be very time consuming, stressful, costly, amongst other things. If the United States threw out their current tax code and replaced it with a flat tax for all that would save us time, money, stress, and having to learn a system that does not make sense to those who created it. Everyone including people who works or does not work pays their fair share of instead of just the working class American. Taxes are part of everyday life living in America. There comes the time of year that new years rolls around again after again and getting all of our paper work together including W2s, tax deductions, or 1099s. Gathering all of the paperwork to file taxes is burdensome and creates headaches. For some, it may but not knowing what form to fill out, waiting on all the...
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...BSRM, one of the biggest industrial groups of the country. The government needs to lay the future pricing policy on market-based prices of all inputs to power projects, he said in an interview. “We gave the Board of Investment (BoI), some nine months back, four to five proposals about the problems we were facing in setting up the largest steel plant and a power project. No one from the BoI has so far called us to hear our problems nor were our applications sent to relevant departments." "How can there be industrialisation under such circumstances?� he questioned. The major chunk of foreign investment is in the export processing zones (EPZs) where labour intensive industries are being set up and which offer a platter of gas, power and tax incentives. But no importance is being given to import substitution industries, he said. “We need active support from different ministries of land, water, power, roads and highways, home and energy to help us smoothly set up the two major Tk 3,000 crore projects which will generate employment for about 1,500." "Today pillar to post, we are just groping in the dark. Of course we are used to it but at what cost to the country?" It will be impossible for foreign companies to come to the country to set up heavy industries outside the EPZs, Akberali said. Talking about his own group, the BSRM chairman said there were only 300 employees to start with and today the group boasts to have a workforce exceeding 1,700 which would grow by another...
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...SAMPLE LISTENING PDP: MOVING HOME: SO WHY DID EMILY PACK HER BAGS AND MOVE TO A DIFFERENT PART OF TOWN? Teacher’s name: Jennifer Raquel Salazar. Level: Intermediate Number of Students: 10 Date: November 18th 2,014 ------------------------------------------------- Henry Alberto Caballero. ------------------------------------------------- Erick Josue Solis. Action points from previous practice teaching Use think-pair-share Make sure there is enough time at the end of the activity ------------------------------------------------- What are you teaching? ------------------------------------------------- Listening strategies, vocabulary and adjectives to describe places. Main Objectives (By the end of the lesson SWBAT): Discuss the differences between places to live. Know how to use adjectives to describe places. Be capable to describe the place where they live. ------------------------------------------------- Assumption: ------------------------------------------------- Meaning of some new words and adjectives related to the conversation. ------------------------------------------------- Challenges/Opportunities for Teaching: Understanding when speakers talk each other, students may...
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...Capitalism and Freedom By: Milton Freidman In Milton Friedman’s book Capitalism and Freedom, Friedman presents his theory, which is the importance of a free economy that is, without government interference. He strongly believes the government should stay out of anything to do with the economy. Friedman is under the impression that any government that is not the most basic government is bad. He thinks that it is important to let the invisible hand do its job and that by interfering with the natural process the system will get messed up. He introduces some radical ideas such as non-licensed doctors and school vouchers. Friedman was under the impression that if doctors were not required to obtain licenses, a better breed of doctors would come along. He thinks that by allowing the modern doctors to dictate whom the future doctors will be the competition for better doctors is impaired. By putting guidelines on who can practice medicine the system is creating the same level of doctor consistency. Friedman disagrees with this process because he sees competition a driving force that makes people to be the best they can be. Therefore, by making want-to-be doctors conform to a certain mold, the cycle of survival of the fittest is ruined. No better doctors or forms of practicing medicine will come along if this process is stunted. Friedman is also for school vouchers. This system of vouchers is the idea of the government giving parents a certain amount of money to spend on their children’s...
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