Tax Reform Essay

There is nothing worse than working hard all year, having taxes withheld from your paycheck, and then finding out you still owe Uncle Sam come April. Taxes seem to be one of the most politically charged issues, with candidates from both parties making the topic an integral part of their campaign. Whether any real movement takes place is something that remains to be seen, as the Nation gears up for the next Presidential election.

This idea of reducing taxes to increase investment within the economy sounds like a good idea but hasn’t lived up to its expectations historically. The idea of supply side economics wasn’t a new idea for the American tax code. During the early 1920s, income tax rates were cut multiple times which averaged to a total of most rates being cut by a little less than half. The Mellon Tax Cuts named after Treasury Secretary Andrew Mellon under Presidents Warren Harding and Calvin Coolidge. He believed that changes in income tax rates causes individuals to change their behavior and practices. As taxes rise, tax payers attempt to reduce taxable income by either working less, retiring earlier, reducing business expansions, restructure companies or spending more money on accountants to find tax loopholes. If executed properly tax cuts can actually benefit economic growth, data from the Internal Revenue Service(IRS) showed that the across-the-board tax cuts in the early 1920s resulted in greater tax payments and larger tax share paid by those in the higher incomes. As the marginal tax rate on the highest income earners were cut from 60 percent or more to just 25 percent, the amount that this tax group payed soared from around 300 million to 700 million per year. (See Figure 2) This sudden massive increase in revenue allowed the U.S. economy to rapidly expand during the mid and late 20s. Between 1920 to 1929, real gross national product grew at an annual average rate of 4.7 percent and

During the past couple of decades, the decline in the middle class has been associated to the political agenda of the Republican Party. By ending governmental subsidies and other programs created to build the middle class, has ultimately ceased the growth. However, realizing the importance of the middle class to our fragile economic platform, the Democratic and Independent political parties are desperately trying to create and revamp the middle class

In the United States, the top one percent received about 20 percent of the overall income for 2016. This creates an uneven distribution of income causing Americans to argue about whether or not the wealthy should pay more in federal income taxes. One side of the argument is that the wealthy make a huge portion of the nation’s income; therefore, they should have higher tax rates. The other side argues that wealthy Americans already pay their fair share of taxes by paying nearly 40 percent and should not be forced to pay more. These arguments both use compelling evidence to make their claims; however, a solution could be reached by increasing the tax rate of the top one percent by only 10 to 20 percent.

The current tax code for the United States is almost 74,000 pages long. Or to put that into a different light: About 116 copies of Herman Melville’s Moby Dick. It is small wonder that a few of the announced candidates for President of the United States, have again begun to kick the tires on the topic of a Flat Tax. But is a flat tax actually a solution to our country’s growing tax complexity? What are the potential economic effects of a flat tax (both positive and negative)? Finally, is a flat tax even a viable solution? In short, will it work? As a concept, a flat tax is spectacular. Simplicity at its finest. As a fiscal policy, I believe that same simplicity must be examined and inspected closely.

Heated debates over tax cut have always been one of the central economic themes on the American political table. Since taxes relate directly to the quality of lives, it is by no means surprising to find people showing significant concern about policies regarding cutting or raising the amount they have to pay. The idea that lowering tax rate makes room for growth has remained generally popular among the majority, taking a possible decrease in individuals’ tax burden and increase in productivity into account. There is, however, extensive research conducted on the topic that produced controversial results. Despite its appeal to instant benefits for one’s saving account and investment, reducing tax rate has yet to show a definite positive effect

More than 35% of American adults are obese and as a consequence, are at increased risks for health issues such as heart disease, high blood pressure, and diabetes ("Overweight & Obesity"). The U.S. taxpayer is supplementing much of the cost to treat obesity related health issues through public health programs such as Medicare and Medicaid ("Economic Costs"). A positive externality will occur in the form of decreased health care expenditures on Medicare and Medicaid. The U.S. government should impose an excise tax on soda and other beverages that contain sugar. Consumers who drink excess sugary beverages impose a negative internality on their health; as well as imposing a negative externality on the American

The American government has struggled with the issue of taxes and the budget for over a hundred years. Class conflict, adversarial political parties, and convoluted economic philosophies have resulted in a never-ending debate over taxation. The New York Times newspaper article, “Senate Panel Vote Backs Budget Plan”, from June 1993, discusses the current feelings of the time in regards to the budget and taxation. Moreover, the article mentions factors such as democrat-republican debate, trickle down economics, and high verse low taxes for the middle class. The issues discussed in this 1993 article differ only slightly from the taxation conversation of today. However, now in 2011, we face a budget crisis that threatens the American economy

So, in Warren’s The Vanishing Middle Class, her question initially was, “What is the middle class?” Which laid out her platform for her main stance: to expose the true issues of the middle class and why they’re suffering. For example, she counters the idea that they’re spending too much money on consumer goods by observing that “fixed” and necessary goods are up while their wages aren’t keeping a pace. With that being said, she makes a suitable point that the cost of living in America for the middle class is rising at a higher rate than the families can handle. In recent studies, like the ones she’s cited using figures and diagrams, have shed light among the profound changes within the incomes of these middle-class families and how they’ve been kept in the shadows. For instance, she addresses the issue of savings and debt in our nation, by providing statistical information based on families over a thirty-year time period to show the dramatic change generation after generation. Warren also emphasizes that people are quick to blame middle-class’ short comings in wages on overconsumption (especially those of luxurious goods), however the facts, stats and graphs don’t match up with that, but that of fixed costs, the things you can’t avoid (housing and childcare) have gone up so the middle-class can’t be to blame for that. Finally, she discusses the impact taxes had on two-income families by emphasizing the ups and downs of family’s incomes over the past generation. Ultimately, what is at stake here is, if the majority of the middle class doesn’t get some form of recognition and attention needed soon, they’re going to be whipped off the spectrum of today’s society.

Dear Congressmen, Blake Farenthold, as you are aware a tax reform bill is expected to go to the floor for a vote. The President as recently drafted a new bill that is supposed to be helpful to Americans. He claims three things with this bill to raise wages and bring jobs home, bring fair taxes for hardworking Americans “The unified framework will cut taxes and put in place a fair tax code for American workers” (Whitehouse.gov), and to create easy taxas for hardworking Americans “The unified framework will make taxes easy for hardworking Americans and let them recover the hours wasted on filing complicated forms” (Whitehouse.gov). With this new bill coming I have created a list of different groups you should take into consideration when

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

Controversy will always follow humans where ever we go. Humans have argued over many issues for centuries, often times with no conclusion or “correct” answer ever in sight. One common issue that has been debated since the early 1900s is whether or not the more wealthy individuals in a society should be taxed more heavily than their poorer counterparts. Many have argued over the pros and cons of the taxation of richer people, but when one looks at it objectively, the pros far outweigh the cons. Not only do the pros outweigh the cons, but a question one must ask oneself is whether or not prosperous people really need that extra money? Richer people should be taxed higher because it is better for the economy, social classes will

When given the option to merge three municipalities, people, living within these towns, would seem hesitant to choose to support the merging because of a lack of support showing that this a good thing. The lack of research done on the effects of merging of three towns, shows that nobody really know what will happen if the consolidation was passed. The three towns of Round Lake Beach, and Round Lake Park would merge into one Round Lake area, as well as, all the business and public services that each town offers would merge into one. The people in support of this merger suggest that merging these three town will save the townspeople money by reducing taxes the people pay.There is a lack of evidence to show how much money merging the three towns would save. The reduction of taxes may be a good thing but it affects more than just the local businesses, local governments, it has effects over the schools and their teachers, police departments, hospitals, and fire departments.

Since the recent passage of the Internet Tax Freedom Act, on October 21, 1998, making the Internet tax free, there has been an intense debate on whether to tax or not to tax Internet purchases. The conservative side, also known as the Republicans, is opposed to Internet taxation saying that it is too costly to collect taxes on Internet purchases. They also believe that since Internet retailers do not have a physical presence in every state, why should the state receive sales tax on a nonexistent store in that state? This would be taxation without representation (par. 18 Lukas). On the other hand, the liberals, also known as democrats, believe that taxation of the Internet should be lawful because

The United States is in a recession; it has been facing some of the worse economic times since the Great Depression in the 1930’s. One option to fix the economy is to change the corporate tax rate. To lower it or to raise it, that is the question economists have been speculating. America's high corporate tax rate and worldwide system of taxation discourages U.S. companies from sending their foreign-source revenue home, which makes U.S. companies defenseless to foreign acquisition from the international opponents (Camp). Corporations and United States citizens have been fighting for a tax reform, which would hopefully help the American economy; either by lowering the corporate tax, or by raising the tax.