WASHINGTON — On the heels of last week's failed attempt to repeal former President Barack Obama's health care law, West Virginia conservatives are looking to pass a new tax policy that will bring economic growth to the state.
President Donald Trump and congressional Republican unveiled their framework for tax overhaul last Wednesday. The plan includes simplifying the tax structure from seven brackets with rates ranging from 10 percent to 39.6 percent to three brackets of 12 percent, 25 percent and 35 percent. The income levels of those rates were not announced in the plan/
The estate tax would also be eliminated, and the personal exemptions for children would be eliminated in exchange for a higher child tax credit.
The proposal would
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Around 3.4 percent live in prosperous communities.
Jason Huffman, the state director of Americans for Prosperity-West Virginia, said changes to the tax code are needed to stimulate economic growth as well as streamline the tax code.
"The last time that Congress attempted and succeeded in reforming the tax code was 30 years ago," Huffman said. "Since then, special interests have lobbied for special treatment and carved out loopholes in the tax code that favor the politically connected over the average American."
Huffman added while the proposal is far from finalized, it is the foundation for a plan that could result in companies creating jobs and people spending more money.
"We have, among the industrialized world, one of the highest corporate tax rates," he said. "If you talk about the corporate tax side, lowering our rate around 20 percent would bring jobs back to America. That's the key critical part of this."
According to the U.S. Congressional Budget Office, the United States has the highest statutory corporate tax rates among the leading developing nations that make up the Group of 20 at 39.1 percent. The country's average corporate tax rate — 29 percent — and effective corporate tax rate — 18 percent — are among the highest among the G-20 countries.
While the framework is far away from becoming law, it would better benefit the wealthiest
Americans that support higher taxes on the one percent believe that this will help contribute large amounts of money to the federal government. According to Patricia Cohen, in a New York Times article, she claims that the top .1 percent of Americans have an average income of about $9.4 million. If the government were to raise taxes to 45 percent on the top .1 percent this would produce about $109 billion in revenue in the first year (Cohen). The federal government could use this money for education, health care programs, and social and income security. Taxing the top .1 percent creates a significant revenue increase, but taxing the top one percent at 45 percent would create about $276 billion in revenue (Cohen). This tax rate will bring in a sizable increase which is why many Americans believe that the top one percent should have a marginal tax rate of 90 percent.
People do not enjoy talking about taxes because they are too political, confusing, and depressing. It is no secret that the American tax code is a mess and something many economists describe as too broken to fix. Despite this, politicians have never stopped from trying to “fix” the code, yet they have had very little success. The U.S. Government’s tax code currently comprises “more than 67,000 pages of complexities” (Boortz, Linder, & Woodall 14). The Americans for Fair Taxation (AFFT) was founded in 1995 with one goal: create the simplest and best tax reform plan that would work in the modern market and economy. The AFFT’s best solution was a bill which they promptly called the FairTax.
With the advancements in the globalization of the economy, corporations are finding more ways to avoid the extraordinary tax rates set in place of The United States Of America. With the loss of revenue from large companies dodging taxes the government must make up for the loss by either raising taxes or changing the tax code. A recent company to avoid american taxes is Johnson Controls, a company that “…would not exist as it is today but for American taxpayers, who paid $80 billion in 2008…”(The Editorial Board). This use of American resources to get through tough times, and run to another county during an economic incline is an act that calls for reform in the American tax system. However congress has not passed any legislation to fix the
The tax system in the United States has changed throughout the years, with many attempts to make it "fair" or "equal" while at the same time generating enough income for the United States government to thrive. It is a complex issue, and a controversial one at that. While it may not be possible for our tax system to ever be fair, it is important to make sure it doesn 't put more financial stress and pressure on one group than on another.
CHARLESTON, W.Va. — For Jason Huffman, state director of the West Virginia chapter of Americans for Prosperity, the congressional efforts to pass tax legislation is an opportunity to spur economic growth.
The current tax legislation that needs reform are the tax rates for families, individuals, businesses, and investors. America needs tax reform because the current tax code prevents economic freedom and reduces the strength of the economy. The current tax base causes double taxation of investment and savings, which discourages the amount of investment in the society. Less investment reduces productivity growth, employment, and real wages. We need a constitutional tax reform that is followed by everyone to relieve the harm of the current tax system and to strengthen our economy. The reform is necessary because the strengthened economic growth would essentially improve the incomes of Americans and enhance economic opportunities.
The flat tax will restore fairness to the tax law by treating everyone the same. No matter how much
The national sales tax would replace our current income tax system by taxing goods and services. Under this system of taxation, people would pay taxes on every item purchased and not on income. This would help the economy through sales. "There would no longer be an inheritance tax or a capital gains tax. The government would impose a 17.65 percent tax on the value of all final sales to consumers. To protect lower-income citizens, the government would send all households periodic rebate checks, the net effect of which would be to offset the tax burden on purchase up to the poverty level" (Mitchell 2). This national sales tax is a popular
By eliminating tax breaks for large corporations, repealing the excise tax on high-cost health insurance, and providing tax relief for middle-class families; the Democratic party hopes to boost the United States’ economy. They believe that increasing taxes on the upper-class and reducing taxes on the middle-class will allow citizens of the middle-class to have more money. This will also allow businesses to continue making money while paying their fair share of
The United States Federal Government currently functions on a “progressive tax system”. A progressive tax system is based on ability to pay and therefor requires members of higher socioeconomic standing to pay higher federal income tax rates. The idea is that wealthy people, whether they are wealthy as a product of their own intelligence and labor or wealthy by inheritance, can afford to pay higher tax rates and still maintain a quality of life well beyond what is considered livable or even standard. This procedure understandably creates a lot of upset in the upper-class community. According to the IRS, in 2007, more that 44% of income tax revenues came from the top 5% of earners and more than 50% came from the top 10%. In the same year, the 400 wealthiest Americans, bringing in an average adjusted gross income of $345 million paid an average federal income tax rate of 17%, whereas the average tax payer during the same time period paid only 9.3% of their gross income to the federal taxes. In 2010, about 45% of all
Taxes in this country help pay for many government and state programs. Right now we have seven tax bracket tax plan for income tax. The plan is based on how much you make, the more you make the higher the present. Paul’s plan calls for a fourteen point five present flat tax no matter how much income you make. The plan also includes a $15000 deduction and a $5000 per a person personal exemption. Retirements accounts would stay the same and still keep mortgage and charitable deductions along with child tax deductions. For business, it would be a fourteen point nine percent business transfer tax that would be levied on factors of production and capital income. The TGM (Taxes and Growth Model) estimates an increased GDP of twelve point nine percent in ten years or about one
The last major overhaul of the U.S tax code took place over twenty-eight years ago as part of the Tax Reform Act of 1986. President Ronald Regan’s Treasury Department proposed a tax-neutral reform with the definitive duty of simplifying the overall code. However, the absence of any reform since then greatly reflects the United States current condition, in that “The United States provides a good example of an uncompetitive tax code” (Pomerleau & Lundeen, 2014). The following will examine the main components of the tax code that make a nations taxing system competitive. It will then identify two parts of the code, that when combined create a disadvantageous environment for any American business who competes internationally.
This may sound like a tax plan that will relieve the financial burden on lower-income taxpayers, directly benefiting the poor, but in actuality, cutting taxes for all in a regressive manner gives substantially more money to the wealthiest taxpayers and a very small amount to lower income taxpayers. According to his plan, a typical American family of four will be able to keep at least $1, 600 more of
Tax rate increase opprobrium on the rich coupled with austerity—arguments for spending cuts--have led to investment stagnation in the US. Investment is needed for long term economic growth. The blame for paltry economic growth, some argue, can be traced to high taxes on business that discourage investment. These high taxes, for example, are the reasons Apple’s CEO is unwillingness to pay billions of dollars in taxes owed the US government. (See Washington Examiner) But Apple’s Tim Cook’s sin is inversion, i.e. locating a company a lower tax country, then selling at cost (including expected profits). their product to the main branch in the US, and pay taxes (if any) on a sliver of profit. This way Apple avoids paying 35 percent to 40 percent
The corporate tax is the curse for economic growth. According to the former Presidential adviser Boskin, President Obama should look up corporate income tax. This suggestion was put forth in 2010. At that time the U.S. had the second-highest corporate income tax rate of any advanced economy. On the other hand the countries like Germany and Canada reduced their corporate tax rate, rendering American companies in poor position globally. (Boskin, 2010)