The Influence Of Tax Credits

Tax deductions reduce taxable income; their value thus depends on the taxpayer’s marginal tax rate, which rises with income. Tax credits directly reduce a person’s tax liability and hence have the same value for all taxpayers with tax liability at least equal to the credit. In addition, some credits are refundable; they are not limited by the taxpayer’s tax liability.

Stewart Elgie, a University of Ottawa law and economics professor and chair of the green economy think-tank Sustainable Prosperity suggests that British Columbia’s per-capita fuel usage had fallen more than 4 per cent compared with the rest of Canada and its economy (Ebner, McCarthy, 2011) Evidently it is reducing the amount of green house gasses emitted by fossil fuel use. However this is not the concern many had with the introduction of the tax, but the concerns were focused upon the externalities caused by this and the effects it would have on the economy. Three years since the carbon tax introduction and the Provincial level of GDP has remained approximately the same, (Greenery in Canada: We have a winner) With the provincial level of GDP remaining around the same, this suggests that at the very worst the carbon tax has had no negative effects to the provincial economy. Furthermore the tax also promised to remain carbon neutral and promised to cut corporate and private income tax. British Columbia has become the province with the lowest income tax regime and the lowest corporate tax regime (Greenery in Canada: We have a winner). Although the carbon tax is being praised by many, it still faces concerns as many still argue the ineffectiveness of the tax and what that means for the province.

Topic Revenue neutrality Controlling the economy Encouraging industries Research and development expenditures Social considerations Earned income credit Charitable contributions Fines and penalties Home ownership Higher education incentives Tax credit versus deduction Alleviating the effect of multiple taxation Double taxation and effect of a credit versus a deduction Wherewithal to pay concept: transfer to

In the beginning, the writers present the process of the research conducted by the MIT researchers and conclusions that showed how even a low carbon tax would be effective at lowering carbon emissions. The writers continue the article by pointing out the effects of different policies, relating to the revenue created from a carbon tax, on corporations and lower income households. Finally, the writers draw attention to the fact that this carbon tax will greatly influence the effects of global warming. This article was written for Americans and is a solution that is perfect for the political spectrum of any government institution within the United States. The article addresses ways that a carbon tax can be used to please both liberals and conservatives. Though the writers did not conduct their own research, they did cite a study conducted by university researchers and a government organization and use interviews with key researchers in the study. Though this article cites only one research study, the idea of a carbon tax is still a viable solution and it will be used in my research to show that there is a viable solution to the problem of air

The 179D tax deduction is part of a federal tax code section that gives tax reducing incentives for the construction of new commercial or government buildings that are energy efficient. Sometimes, it can also be used for other buildings that are remodeled to include new energy efficient features though. It is unique in comparison to other tax credits because of the way it can give both the building 's owner and the architect who designs the structure tax incentives. Because it motivates people to choose environmentally safe building attributes, it is also sometimes called the Environmental Protection Act (EPAct). Many people have become interested in this credit because it offers a hefty tax discount of roughly $1.80 for every square foot of the building that is claimed. This can quickly reduce a person 's tax burden, especially if it is combined with other tax credits, such as the Manufacturers ' Energy Efficient Appliance credit. But, those who wish to claim the deduction must include special features that support energy efficiency. Some of them include:

As western society has been aggressively expanding, the consumption of materials has followed suit. This leads to a negative effect on the environment. To curb the decay of the planet, it is important for humans to have a handle on how much we consume. One consequence of consumption is the emissions produced by our vehicles. It is crucial to develop a government policy that most effectively controls and reduces the amount of these emissions we give off. While the government has introduced many subsidization policies, the most efficient policy the government could enact is to raise the taxes on gas.

The federal government and many state governments offer various tax credits, incentives and larger Section 179 deductions for increasing energy efficiency, accommodating people with disabilities, removing architectural and transportation barriers to mobility-challenged people and encouraging entrepreneurs to revitalize certain enterprise zones in some urban cities and areas where natural disasters have occurred.

Tying into the previous paragraph, the $120 billion the tax raises per year could be used in order to support programs and foundations that fight the devastating effects of pollution around the globe. According to the EPA Government website, the annual EPA budget is only $8 billion (EPA). Also on the EPA website, only 12% of the proposed budget will go towards clean air, totalling $960 million for clean air. To make it even worse, part of the EPA budget is dedicated to clean water and land restoration. This means that that one natural or man-made disaster could potentially spend the EPA budget. The carbon tax could provide the EPA and other environmental agencies the boost that they desperately need.

A tax credit refers to the sum deducted from the gross amount that a taxpayer owes the state (Tax credits, 2012). A tax is usually granted for different types of taxes. Some of these include the income tax, VAT or property tax. It may also come because of recognition of taxes already paid for the purpose of encouraging investment as well as other behaviors. Concerning some systems, tax credits are usually refundable such that they can exceed the relevant. Most of the tax systems usually grant tax credits to individuals as well as business (Tax credits, 2012). These grants always vary by type of credit. Many tax systems the taxes paid directly as credits but not prepayments. These are cases where the tax credits are invariably refundable (Hammond, 2010).

Environmental credits (ECs) such as carbon credit, nutrient credit, and water quality credit are designed to conserve the environmental and ecosystem services and to promote sustainable development. ECs-trading in a market creates incentives for the protection of environmental amenities along with minimization of associated externalities. It also helps to meet the regulatory requirement for the emitters. The regulation restricts stakeholders to load or emit pollutions in specified amount (i.e. emission cap) but the flexibility of loading emissions is maintained to allow trades to occur between different agents. The least polluting agent can sell the conserved amount of pollution (i.e. specific emission permitted by regulation minus emission

In managing the emissions of GHGs(Green House Gases), carbon taxes will be imposed mid 2012. "Economic theory anticipates that with the increased costs of emitting GHGs, drives emitters to downsize their activities." Salem Press (2009)

These are two types of equity that are applicable to a progressive tax system. The first one is horizontal equity, which states that “two tax payers in similar situations pay the same tax” (Spilker et al., 2014, p. 1-20). Unfortunately when we take a closer look at the particular situations we find exception to prove this different. The second one is vertical equity, which determines that tax payer will pay more taxes if they have the capability.

First of all, I want to address the increase in household income by comparing the increase in EITC with the increase in minimum wage. Athreya, Reilly, and Simpson (2010) divided the EITC into three phases: phase-in, which is the period that the more workers earned, the more credit they receive; plateau, which is the period that workers can only receive credits up to the maximum and phase-out, which is the period in which workers will stop receiving the credits. Therefore, the labor supply curve will be viewed as:

A lot of economists believe that placing Pigovian taxes on pollution is a much more efficient way

The standard deduction can have an effect on the environment economic fast growing trend of new products, green technology, and gasoline tax, new manufacture that produce strong green component to decrease product that causes environmental pollution to create a stable environment. According to the Internal Revenue Service, “the standard deduction was introduced into the federal tax code with the passage of the individual income Tax Act of 1944 (P.L. 78-315).” Future more; the total amount of recipient who receives the deduction varies from year to year and also listed below is the filing status Medows (2015), reported according to the IRS two out of every three taxpayers claim the standard deduction on their income tax returns in 2014.