...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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...1 Wipula 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...
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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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...Income Taxes: Flat or Fixed Since President Abraham Lincoln introduced income taxes, it has been a profoundly discussed topic among the citizens. Americans have innumerable amount of beliefs and disagreements about how the tax brackets function and should function. A large number of Americans are pushing for a change in the way income tax system work. At the same time, many agree to keep the income tax brackets that separate the wealth classes. The controversy in connections with income taxes is ongoing. Is a flat rate income tax the most efficient for the United States government? Tax brackets have been around since the beginning of income taxes. Income taxes began with the passing of the sixteenth amendment. The sixteenth amendment states,...
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...candidate with the most hard-line stances against President Obama. Real estate mogul and television reality star Donald Trump, the twelfth GOP candidate announced his run on June 16, with the slogan, America doesn’t win anymore. When it comes to the issues, taxes have always been in the top five in every election, but recently immigration has been a leading issue. In fact during his announcement, Donald trump was very outspoken about Mexican illegal immigrants and during the first GOP debate, he added that he is openly confronting the severity of the immigration problem that “others won’t publicly acknowledge.” On the immigration issue, Senator Ted Cruz has taken active measures reform the legal immigration system and uphold the rule of law. As for taxes, Cruz believes that major tax reform, is the most important fiscal issue facing the U.S. He believes that the most important tax reform would be to get rid of the IRS. Donald trump has a more liberal tax that slashes taxes for the poor and levies higher taxes on the rich. By April 15, Americans will pay about 2.1 trillion dollars in combined federal taxes. The average American pays an income tax rate of 10.1 percent, although that varies depending on their income. Taxes fund the services provided by the government. The current federal tax system consists of five types of taxes; personal income taxes; social income taxes, which employee and employers pay into social security, Medicare, and unemployment compensation; corporate income...
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...the U.S. Tax Code Accounting 307: Federal Taxation Professor Margaret Parrish Kinisha Doley-Griffin November 24, 2013 Should the tax system be reformed or should it not be reformed. That has been the question for years asked by congress and the people. Congress has not acted upon changing the tax system once during the debates. Many proponents of the tax reform support one system over another. We have heard multiple new suggestions for tax codes such as value added tax, a national sales tax, fair tax and the flat tax. The flat tax has been in talk since the 1980’s, it was first suggested by two colleagues at the Hoover Institution, Robert Hall and Alvin Rabushka. Hall-Rabushka proposed that the present system would be replaced with a consumption tax. (Lang, 2012) This means that income would be taxed at the amount withdrawn or initially earned. This is the only time that the money made will be taxed and you would pay no other taxes. The flat rate tax will be set initially at 19 percent and would offer a family exemption. The goal is to have the flat tax rate set as low as possible and to keep the taxation base as broad as possible. Their plan is to maintain revenue neutrality for the government and allow taxpayers to keep more money they earn in their pockets. In my opinion I think that the flat tax rate is as far as one can get. Yes, no one wants to pay taxes at all but living in America this is something that you must do or you will be fined. With the flat tax it will...
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...overseeing the US Tax Code The Internal Revenue Code IRC), formally the Internal Revenue Code of 1986, is the domestic portion of Federal statutory tax law in the United States. IRC was published in various volumes of the United States Statutes at Large, and separately as Title 26 of the United States Code (USC). The primary role of the federal tax code is to raise sufficient revenue to pay for government services, benefits, programs, and investments. I am in favor of a tax reform. I believe it is important to have a simplified, transparent tax code that eliminates hidden tax exemptions, credits and deductions that benefit only a few. By improving our tax code, we will be able to incentivize employers to start hiring while also reducing taxes for all. The US Congress needs to do a better job on the current tax code. First, the tax code needs to be more simplified for any American can read and understand it. After I review the current tax code I was more confused. Our current tax code should reflect our current economy. US Congress should not should our code based on who is in office but rather what is best for our economy. Since 1986, Congress has made 15,000 changes to the tax code. So simplifying the tax code, theoretically, would cut back on compliance costs and put more money into the pockets of ordinary taxpayers. Two Major Tax changes America’s tax code is broken and must be reformed. In the quarter century since the last comprehensive tax reform, Washington...
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...Tax Reform: An Examination Tax Reform: An Examination A flat tax rate would be beneficial to all Americans. Critics of such proposals generally say that the wealthiest people in the nation would be the ones to benefit the most. The overall flat rate of tax would mean cuts for all Americans. The sheer simplicity of a flat rate is one of its biggest selling points. Rick Perry's plan offered in 2011 was imperfect, but it represented a overall structure and ideas. The focus of the plan scrapped, “the graduated income tax and replace it with a 20 percent flat rate. By throwing out rates as high as 35 percent and eliminating estate and investment taxes, the plan would grant a major tax cut for the wealthy…his proposal would also offer benefits to middle-class Americans by giving a $12,500 deduction for every member of a household while preserving exemptions for state and local taxes, mortgage interest and charitable contributions for anyone making less than $500,000. He said anyone could still file under the current code, and he also pledged to lower the corporate tax rate to 20 percent, from 35 percent” (Oppel, 2011). This means that taxes will be sliced for all groups in America: this will equate to more money for individual Americans, allowing them to make a greater investment in the private economy. The plan was criticized as being ambitious because of the fact that most Americans wanted to see the wealthier...
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...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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...Reforming the U.S. Tax Code Martin McDowell Professor Ken Lavery 11/24/13 Reforming the U.S. Tax Code A flat tax rate would be beneficial to all Americans. Critics of such proposals generally say that the wealthiest people in the nation would be the ones to benefit the most. The overall flat rate of tax would mean cuts for all Americans. The sheer simplicity of a flat rate is one of its biggest selling points. Rick Perry's plan offered in 2011 was imperfect, but it represented a overall structure and ideas. The focus of the plan scrapped, “the graduated income tax and replace it with a 20 percent flat rate. By throwing out rates as high as 35 percent and eliminating estate and investment taxes, the plan would grant a major tax cut for the wealthy…his proposal would also offer benefits to middle-class Americans by giving a $12,500 deduction for every member of a household while preserving exemptions for state and local taxes, mortgage interest and charitable contributions for anyone making less than $500,000. He said anyone could still file under the current code, and he also pledged to lower the corporate tax rate to 20 percent, from 35 percent” (Oppel, 2011). This means that taxes will be sliced for all groups in America: this will equate to more money for individual Americans, allowing them to make a greater investment in the private economy. The plan was criticized as being ambitious because of the fact that...
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...His opinion is very crucial for this controversial topic. As a world renowned doctor, he possesses deep knowledge for all things medical. Carson also hates Obama’s Affordable Care Act. He wants to get rid of Obama’s healthcare and create health care savings accounts for the American people. Carson is in favor of a flat tax (Republican Candidates, 2015). A flat tax should be put into use because the American people should not be taxed based on their income. The way the government has been taxing people looks as if like they want people to be poor, so they punish the people who are well off and successful. This is why a flat tax is the perfect choice for everyone, especially the middle...
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...Common Sense Approach to Reforming the Federal Tax System On February 3, 2013 marked the 100th birthday of the 16th Amendment. The 16th Amendment paved the way for the creation of the federal income tax that continues to this day to have far reaching repercussions on the American tax payer. Before the ratification of the 16th Amendment, the birth of the federal income tax dates back to the Civil War. In order to finance the Civil War, President Abraham Lincoln signed into law Revenue Act of 1861 on August 5, 1861. The Revenue Act consisted of a flat tax rate of 3% on income above $800 and 5% on individuals living outside of the United States. On July 1, 1861 United States Congress repealed the Revenue Act of 1861 and replaced it with the Revenue Act of 1862. The Revenue Act of 1862 introduced a progressive tax and established the Bureau of Internal Revenue. In 1872 Congress repealed the Revenue Act of 1862. One again elected officials tried to revive the federal income tax in 1894. However, in 1895 the federal income tax was declared unconstitutional by the U.S. Supreme Court because the tax was not apportioned according to the population of each state. In an address to Congress on June 16, 1909 President Howard Taft proposed that Congress consider a new amendment to the Constitution. “I recommend, then, first, the adoption of a joint resolution by two-thirds of both Houses, proposing to the States an amendment to the Constitution granting to the Federal Government...
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...the 2016 presidential election approaching, Americans should highly consider voting Republican if they want to better education, lower taxes, and focus government on local levels. It is important to understand what the party stands for and the reasoning behind it. With all of the controversial issues among the American people the country needs to know who they are voting for. The Republican party started in the 1950s by anti-slavery activist, the actual name “republican” was chosen to reflect equality. Abraham Lincoln was America's first Republican president and under him Americans got the 13th, 14th, and 15th amendment abolishing slavery. The party was also the first to support women's suffrage and most of the states that voted for...
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...million times before the presidential election season is over. It will come in the form of “simplify,” create a “flat tax, “reduce,” or “re-classify” are all key terms to look out for. The truth is, the reforms these people talk about, I’m 90% sure, won’t happen. SO WHY DO THEY PROMISE IT!? Here’s why … I HATE TAXES! The natural thing for a politician to assume is that people hate taxes (the next logical thing to assume is social stances of your constituents, which you would derive from a variety of methods). From this base assumption, it’s no wonder politicians emphasize tax overhaul in speeches. It gets people riled up when thinking about all the money they could save. People think of vacations, cars, TVs, HOME REPAIRS, BOATS! THE POSSIBILITIES! … or they just think about keeping their water and lights on. Anyway, politicians then lay out possible solutions to...
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...Amber Huckabee Mrs. Miller English III Honors 21 February 2013 Allusion Report #1: Divided House The Divided House is a historical allusion. It is considered a historical allusion rather than a biblical or classical because the “Divided House” was a speech given in 1858 by Lincoln and has affected today’s society. The purpose of the “Divided House” speech was for Lincoln to tell the public what he thought the future would hold. To him, the idea of the slaves moving westward was a horrible idea, and thought all slavery should be kept in the south. The “Divided House” is important culturally for multiple reasons. First off, the “Divided House” kind of is what set today’s black and white society as we know. Without this important speech, slavery may have moved out west and continued longer that what it had. If Lincoln hadn’t stated, “I believe this government cannot endure, permanently, half slave and half free.” (Lincoln), we may even have slavery today due to the fact that the west is such a vast property to control. Also, the “Divided House” helped with the beginning of the end of slavery. After Lincoln’s speech, segregation had started and eventually the 13th amendment was passed which banned slavery all together. Some important information you may want to know about the “Divided House” is that it was one of Lincolns major speeches told in the year 1858 in Springfield. The purpose of the speech was to convince Americans to keep slavery in the South. By keeping slaves...
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