The Issue Of Tax Reform

While most taxpayers agree that tax reform is necessary for our country the problem they encounter is the difficulty they experience when trying to understand all the political terms used when discussing tax reform. This paper is an attempt to help the taxpayers of our country to better understand the political terminology and gain knowledge about some of the proposals that have been explored.

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.

The tax policy in the United States is very confusing. When the tax policy was originally written in 1913 it was four hundred pages. Now, over the past ninety one years, that tax policy has evolved to over 72,000 pages. Since the tax code has become so lengthy and nearly impossible to understand, the topic of tax reform has been in the minds of many. Although, most barely think about tax reform until tax season. It is a controversial subject due to the impact a change in tax code would have on the American people. The two most popular and widely known stakeholders in this debate are the two major political parties in the United States, the Democrats and the Republicans. The two parties share absolutely no common ground on the subject of

In the article “Job One: Tax Code Rewrite,” William O’Keefe, an author who cares about tax reform, argues that the Obama Administration should rewrite the tax code in order to reduce the unemployment rate. He supports this claim with a formal tone by using opinions and anecdotes as evidence. According to William, we need “systematic reforms to our tax code and regulatory policy.” The author targets a tax reform audience that cares about the economy. William’s purpose is to persuade readers that Obama’s stimulus tax bill will not help the economy or business in the long run. This work is significant because it challenges the Obama Administration to rethink their priorities.

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.

With the presidential elections coming up, different tax policies are being debated between the candidates. Whether it is proposed by a Democratic or a Republican presidential candidate, there have been many possible solutions presented on how to reform the current tax code. Focusing specifically on four candidates, two from the Democratic Party, and two from the Republican Party, I will compare and contrast their respective tax proposals. While the Democratic candidates generally agree with President Obama’s current tax code, all four candidates are looking to reform it in some way in order to, in their own eyes, better the current tax code affecting today’s citizens.

No matter how effective a plan may be at the former, if it cannot succeed at the latter it will never be implemented. Convincing enough voters to support the tax plan will be extremely difficult, due to both the high levels of ideological opposition to taxes and the resources and organizational strength of the measure’s primary opponents. Per an April 2016 Gallup poll, 61% of Americans believe that the wealthy pay too little in taxes (Gallup), so Americans at least agree in principle that taxes should be increased for the wealthy. Additionally, by emphasizing elements of the measure that could appeal to conservative voters, such as keeping money from leaving the economy, candidates could generate crossover appeal to both conservative and liberal parts of the electorate. The chief difficulty, ultimately, will be overcoming the formidable organizations those with a vested interest in keeping taxes low can bring to bear. Just as they did in the 1970’s, business and financial leaders will marshal their extensive “capacity to launch multi-faceted campaigns” (Hacker 125), exerting pressure on incumbent candidates to distance themselves from the new tax policy and organizing opposition via advertising, political action committees, and donations. To counteract this disadvantage, candidates must mobilize wealthy liberal activists sympathetic to the cause of tax

In America, we enjoy freedoms that we often take for granted. We have the power to decide things for ourselves, such as our leaders, our rights, and our liberties. We have the ability to debate and evaluate the effectiveness and the relevance of a law or bill, and we must use this power when it comes to the methods of taxation. Currently, the US uses a progressive income tax as its means to raise revenue. Deborah Lee and Richard A. Grant, in “Counterpoint: Expanding Sales Taxes Helps the Rich, Hurts the Poor,” believe that a progressive income tax is the fairest and most constructive ways to fund the government, and that such a tax benefits the poor more than a sales tax.

As already stated one of the hot topics that seem to be at the heart of the political primaries is the topic of taxes. Many candidates are also proposing to rid the nation of the “overcomplicated” progressive structure we have now and replace it with a flat tax. Mary LaPonsie of moneytalks.com emphatically states that the “tax code clocks in at an outstanding 73,954 pages as of 2013, it includes seven tax rates, four standard deductions, and at least a dozen tax credits

Republicans and Democrats historically have found it difficult to agree on many policy issues, and taxation represents another area of disagreement. Each party’s ideology partially explains why they take a different approach to taxation and furthermore alludes to the different coalitions present in each party. Democrats traditionally favor higher taxes, while Republicans feel as though raising taxes is inefficient. The past twenty years illustrate these two stances, and each party clearly has a history of rhetoric and policy preferences to confirm this. Each president or presidential candidate from each party has reflected a position consistent with the party’s overall stance, and this in turn explains why each party has had trouble coming to an agreement over tax policy. Furthermore, other policy issues play a role in taxation policy for both parties. Specifically social welfare and government programs correlate with taxation policy, and each party has an entirely different view on how such programs should be operated. With a fundamental difference in ideology and a different set of interests, Republicans gravitate towards less taxation while Democrats favor higher taxation.

The congressional proposed tax changes will adversely affect the U.S. middle class. According to Pew Research, which claims to obtain its data through non-partisan demographic research and public opinion polling, the American middle class, defined as those making two-thirds to double the median income, makes up about half the population. Further information in this paper is obtained from reliable sources such as the New York Times and the Washington Post, which are typically regarded as center to left, As well as right-leaning sources such as Forbes magazine, whose chief editor, Steve Forbes, is a major Republican. The Congressional Budget Office and the US Census Bureau also supply reliable, researched data, and both Time Inc, Money, and

The current federal income tax system in the United States (U.S.) is progressive based on the vertical equity principle. However, the tax code is getting increasingly complex and the wealthy are able to avoid paying taxes through loopholes. Hence, more people are yearning for fairness in taxation. With the looming 2016 presidential election, Senator Rand Paul’s proposal of ‘Fair and Flat Tax’ appears to have the most significant change to the current tax policy and I will now analyze if this proposal will improve the efficiency and equity of the U.S. tax code.

In a world filled with economic turmoil, one might look at a loaf of bread today at the grocery store and wonder if it will cost the same tomorrow. The inflation factor has driven prices of food, energy and many other life essentials to an all-time high. In countries like America where the national debt has soared into the double digit trillions. It becomes a question in the minds of many, “how will we ever pay this money back?” This is a question of great magnitude and many factors decide if, and how it is possible. On a much smaller scale, the average household in America lives within a budget to manage income to debt ratio. This budget allows for the necessities to be purchased while allocating a set amount for debt obligations. When there is not enough money for required expenditures, adjustments must be made to compensate. This type of adjustment is comparable to the adjustments that must be made by the American government to allow the debt ceiling to be lowered, while still making financial obligations for consumer families affordable and manageable. This concept is often referred to as tax reform, and it is the only way America will regain strong financial standing as a country.

The one topic that has continually been a major topic in the United States is the topic of taxes. It has been a key component of political campaigns at all levels since the political scene has been of interest to me. There are two major tax systems that are viable options in the U.S. today. There is the federal individual income tax system and a single rate flat tax system. The U.S. currently uses the federal individual income tax system. This type of tax system got its start in 1864 after the American Civil War (‘The New Income Tax,’ Dunbar). It was the second tax ever used by the U.S. and was the first tax used during a time of peace. The tax system has continually become

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.