Tax Laws

1280 Words Mar 13th, 2016 6 Pages
Professor Emanovsky
Econ 2015
Should Tax Laws be Reformed to Encourage Savings? What defines a nation’s way of life and standard for living depends entirely on its ability to function economically. In addition, the rate at which a country saves is the key to determining its prosperity from a long term perspective. More businesses with more facilities and more equipment equal a greater degree of productivity and greater income for employees. This formula transfers to show greater income for consumers and proves clear relationships between national saving rates and terms in which we measure economic well-being. In addition to the large scale national example, there is also an obvious connection between increased savings and families who
…show more content…
In some cases, families intentionally save very little in order to qualify for these educational benefits. Some supporters for tax law reform suggest expanding the ability that households have to use tax advantaged savings accounts such. In such accounts, owners do not have to pay taxes for interest until the money is withdrawn at retirement. Unfortunately, such accounts limit how much can be deposited, who is authorized to withdraw and when. In average American households, where the potential for real emergencies is consistently present, the unavailability of funds when they’re needed is a real deterrent from putting money in such an account in the first place. One of the most likely beneficial changes would be something called the Financial Security Credit. This credit would benefit low/middle income homes who save money at tax time because it would give them an opportunity to open a savings account directly on their tax form but it would not discriminate against those who already have savings accounts established. In addition, it would support a larger variety of current savings products and would match every dollar that low/middle income tax filers deposit in a designated savings account and add an additional dollar from the federal government. Such a plan would have a cap at $500 annually and would also deposit matched credit directly

More about Tax Laws

Open Document