The Case For A Progressive Tax

The arguments regarding federal progressive income tax has been represented to us through the United States Supreme Court, on the floors of congress, and in media. The revenue from taxes reached the objective of financing wars from the Civil War through World War II. At the same time deteriorating the economy with fewer dollars that could be used on imports, exports, and services (Henchman). Today, the United States deficit is $18,800,241,350,538.12 this is a grand total of 58,405.32 owed by every man, woman, and child (Brown). The legal illusion is presenting the question, is income tax legal? There are Americans today who believe income tax is not legal and stand by their beliefs in a movement that has cost many individuals considerably. I am interviewing such a person, his name is Bobby Ray and the history he presented to me was interesting, and has left me with more questions than answers.

When comparing the benefits and issues between the flat tax and the progressive tax, it is important to understand the way these two systems operate in today’s economy. The flat tax can be defined as a tax that requires every individual to pay the same rate of deduction regardless of their income. On the other hand, a progressive tax can be defined as a tax where the tax rate is increased based on the income a person earn. This system is operated through the use of tax brackets, where the levels of income are divided into different ranges with each range having a tax rate more significant than the range below it. Furthermore, when evaluating the efficiency of both of these tax systems, one may discover that the progressive tax system provides several different factors that contribute to the efficiency of the economy in United States.

Whilst William McBride, chief economist for Tax Foundation website, sided with tax cut policy saying that to strengthen the financial state, “we should lower taxes on the earnings of capital,” “workers and the businesses that hire them,” Chye-ching Huang and Nathaniel Frentz, both are senior Tax Policy analysts, completely debunked the evidence McBride provided to support his argument, which includes the review of twenty-three among twenty-six studies he thought to advocate the idea. Indeed, as one conducts research, regardless of what sources it comes from, agreement over tax issue should never be found as a unanimous answer. One of the reasons why it is so difficult to reach a definite conclusion rests on the fact that although some statistics may show economic growth was in step with tax cut, correlation does not mean causation: just as ice-cream sale and murder rate increase during summer time, it is baseless to assume that higher ice-cream consumption leads to higher odds for crime. Moreover, because there is a great amount of research has been done on taxes, different interpretations from these data are understandable. Before concluding that “nearly every empirical study of taxes and economic growth published in a peer reviewed academic journal” finds cutting taxes improves the financial status quo, thus, people need to consider

In this paper I will be discussing the wealth gap. I will also be discussing if there should be a “special” tax to redistribute the wealth. I hope to enlighten the reader of the issue of the wealth gap, and if a tax would help.

Generally, the income earners pay less income tax and more payroll taxes while the high-end income earners pay more income tax and less payroll taxes. The low income earners however get credit benefits as the government pays for their payroll taxes. Therefore, the high income racket still suffers the burden of individual taxes. In 2014, the bottom 20% had an effective tax rate of -4.5% while the top 1% faced an average of 24.6% a margin of 29% creates a very huge economical gap between the rich and the poor. This only ends up hurting the economy more. As a result, I believe the highest effective tax that should be applied to the top 1% should not be more than 20%. If it goes beyond 20%, they shall start demanding for tax cuts and further design ways to evade the tax payments.

The main topic of this research paper is taxation. Seeing that this topic is pretty open, I’ve chosen to write about the proposed idea of Fair Tax. Along with a little bit of insight on Fair Tax and a couple highlights of history, I’ll try and explain some pros and cons as well as give my opinion on the topic.

Disagreements about the optimal level of wealth inequality underlie policy debates ranging from taxation to welfare. We attempt

As with any ballot issue, the opposition to Issue 3 was far reaching. The Commercial Builders Union was one organization that came out against the amendment. The group feared workplace safety issues created by workers under the influence. Politicians also let their feelings be known, such as Ohio Attorney general Mike DeWine. In Colorado, lack of regulation has resulted in increased emergency room visits for children having accidentally ingested marijuana infused candies. DeWine, having visited Colorado recently, stressed that a lack of regulation, like what exists in Colorado, is one of the many faults Ohioans should see in Issue 3. Similar to DeWine, the Fraternal Order of Police of Ohio voiced concerns about accidental consumption

According to Brimley, Verstegen, and Garfield (2013) an effective tax system includes the following traits; a good tax system must tax all individuals in the society, be coordinated, and balanced since everyone in the district either benefits directly or indirectly from the conveniences provided by the taxes collected. With this in mind it is important to understand that changes in the tax structure need to be implemented gradually so that those who are affected will be able to afford the new taxes. Also the taxes should not be duplicated between the three levels of government, that way taxpayers are not paying the same tax twice or even thrice. All taxes that the population is asked to pay should be transparent in nature so that they are easily understood and taxpayers know where and how the revenue collected is being used. Finally all individuals and businesses residing in a district should be taxed without bias applied in any way. These characteristics should ensure that a federal, state, or local tax system is effective in it’s collection and disbursement of tax

Taxes are a necessary component for operating a government, however, they are also the source of great debate within our society. Especially when considering what types of taxes to use, and how much to tax the population without negatively impacting the economy. Income taxes are currently one of the biggest sources of income for the government, but are also one of the biggest concerns given the level of complication involved with the current tax system. Although many argue that the current progressive tax system contributes to our country’s economic growth, research indicates there may be benefits for simplifying the income tax system without stalling growth. One theory indicates implementing a flat tax system would not only provide consistency for businesses and consumers, it would positively impact economic growth. If given the appropriate considerations, including an equitable rate, a flat tax would increase consumer confidence and lead to an increase in consumption, and ultimately growing real gross domestic product (GDP).

The reason why progressive taxation is considered fairer and why flat taxation policy is avoided is because the people with lower income have lower ability to pay and the major part of their income is spent on necessities, a flat taxation policy would burden them more. Both the taxation policy have their pros and cons. A progressive tax shifts the burden on the people with higher income, it reduces the amount that the people with lower income pay. Because it reduces the burden of tax it results in reduction for the need of subsidies. Meanwhile a flat taxation system reduces the tax burden on people with high income and gives them an opportunity to further increase their investment. Several reasons can be given to justify progressive taxation policy over flat taxation policy. One reason is that those who earn more can afford to pay more, without having to curtail their standard of living or in any way reducing their chances of prospering Also another important justification is that the small businesses find it difficult and struggle more compared to the big ones and hence burdening them with large amount of tax will

The argument of taxation is always brought forward in presidential races. It is a major point that can heavily influence the opinion of voters and their support for a candidate. Throughout the history of the United States, the common themes of Republicans lowering taxes and Democrats raising taxes have prevailed. Although these tax plans don’t always perfectly fulfill party

Though the necessity of taxation is generally not disputed, several theories and principles exist to determine what constitutes an effective system of taxation. Economists maintain taxation should ideally be simple, equitable, and efficient. Three main taxation philosophies exist, regressive taxation, proportional taxation, and progressive taxation. Regressive taxation places the largest tax burden on those who earn the least amount of money and less burden weight on those who earn more. Payroll taxes

Taxation systems are usually modeled in such a way that they take into consideration the social welfare of the citizens. The government and other policy makers have the responsibility of ensuring that the system takes into account the needs of the citizens. The bottom line is that taxation should foster equal distribution of resources. The rate of taxation is usually arrived at after several considerations have been made. The rates are not fixed as they depend on the various economic changes. The issue of how taxation should be distributed among the different economic classes is yet to be addressed.

The fundamental principle behind the evaluation of tax policy as described by Economists George Break and Joseph Pechman is the following: “The primary goal of taxation is to transfer control of resources from one group in a society to another and to do so in ways that do not jeopardize, and may even facilitate, the attainment if other economic goals” (Mikesell, 2010, p. 343). This means tax policy is about minimizing economic or social harm – a damage control. Therefore, as public servants we must thoroughly evaluate any changes to tax policy and let the criteria guide our decisions. The tax evaluation standards that most economists agree on are the following: equity, efficiency, adequacy/elasticity/stability, collectability, and political effects or transparency.