The Issues of Taxation

Business taxes can have a huge impact on the profitability of businesses and the amount of business investment. Taxation is a very important factor in the financial investment decision-making process because a lower tax burden allows the company to lower prices or generate higher revenue, which can then be paid out in wages, salaries and/or dividends. Business taxes include, Federal Income Tax; a tax levied by a national government on annual income, Payroll Tax; a tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee, Unemployment Tax; a federal tax that is allocated to unemployment agencies to fund unemployment assistance for laid-off workers, and Sales Tax; a tax imposed by the government at the point of sale on retail goods and services. Sales tax is based on a percentage of the selling prices of the goods and services. Consumers pay sales taxes, but effectively, business pay them since the tax increases consumer’s costs and causes them to buy less.

Please describe the concept of “double taxation” and discuss which entity(ies) are subject to this type of taxation. (5 pts)

British Parliament declared that the crown and the British parliament had the right to make laws that affected the colonies so as to maintain order. The mother country also had the right to maintain a military presence over the colonies if it was so required. Concerning taxation, Jenyns states that the colonists’ view that taxation must be preceded by the power to elect representatives is unfounded, citing the example of towns in Great Britain who did not have explicit parliamentary representation but are still taxed (Para. 2). Also, the document refutes the notion that taxation can only Thus, with the consent of the people. Therefore, Parliament had the power to impose taxes on the colonies and additionally held the right to use these taxes.

The main objective of many companies is to minimize their tax obligations. Jeffers (2014) discussed the reason of why companies adopt tax inversion strategies. The researcher indicated that the income maximization is a major reason of companies attempting to reduce their tax liability (pp. 100-101). Tax inversion strategies provide companies an advantage to lower income tax rate. Today, U.S. corporations renounce its U.S. citizenship and move to low-tax countries. Companies that reincorporate oversees are not obligated to pay U.S. taxes on earning income (p. 99). Many countries implement tax competition strategies to attract and retain businesses. Well-known companies, such as Exxon Mobil, Hewlett Packard, Tyco, General Electric, PepsiCo, etc. take benefits of tax shelter opportunities overseas (p. 102). Other benefits of the jurisdiction abroad are flexible banking laws and simplified litigation processes.

Taxation surrounds us in the world. Individuals fear tax, and a majority of the items we use and need are taxed. Even on topics such as Celebrities and the Olympics, taxation manages to find its way to still come up.

The Main Characteristics of the Various Forms of Organizations / Entities Available to Penelope, Mark, and John

Few Americans believe that their taxes are too low, especially when the amounts they pay in addition to federal and state income taxes are included. For example, individuals as well as their employers remit payroll taxes. There are federal taxes on gasoline, cell phone bills, hotel rooms, airline tickets and a bevy of other goods and services. Sales taxes and property taxes place an additional burden on consumers. Furthermore, there are numerous fees that are little more than thinly disguised taxes, such as disposal fees, tolls and building permits. Although the issue of taxation can be unpopular with voters, Hillary Clinton has repeatedly vowed to increase taxes and will likely keep her promise. However, the question remains as to for whom she plans to raise taxes.

Benjamin Franklin once said, “in this world nothing can be said to be certain, except death and taxes.” Taxation has always been a hot-button issue in the United States, as it was one of the primary reasons the United States revolted from the British. The media have once again turned its attention to the issue of taxation, but primarily on the increasing of taxes solely on upper-class citizens. The United States currently employs a progressive tax rate, which means that the upper class already is liable for a higher percentage of taxes. During the current presidential campaign, each of the candidates has their own unique idea of tax reform. Some of the candidates’ tax plans cut taxes for all through the change to a flat tax rate, while other plans do quite the contrary and raise taxes for all. The candidates who are favoring the increase of taxes on the wealthy are attempting to enact laws, which increase funding for government programs, attempt to redistribute the wealth to the lower class, and eliminate the debt of the United States. However, the candidates who are attempting to enact a flat tax rate are attempting to eliminate outdated government programs and to help to increase jobs. A higher tax rate on the wealthy through a progressive tax system, at a cursory glance, may appear to be beneficial, however, I am arguing to show the negative effects not only for the wealthy but the United States economy as a whole.

The United States of America is a country well know as “the land of opportunity.” In many aspects this is very true, almost anything can be sought out and accomplished. Of course, the phrase “nothing is ever truly free” goes hand in hand with that. Taxes are the evidence that back up that statement, no matter what you do or buy or sell here the government will always be getting its piece to. We all get taxed for making purchases, for owning a home, for having a business, and even for working to make money. As you can imagine no one ever wants to pay taxes but the taxes collected are used to continue many different programs in our country. Many people don’t

America has come a long way since gaining their independence from British rule which was the result of the colonial protests in the 1760s due to over taxation. These taxations directly led to the American Revolution in which this new independent nation collected taxes on land and property amongst many other things of value. Since that time there had been no taxes collected on religious organizations and their charities affiliated. This has been an ongoing controversial issue since the Establishment Clause in the First Amendment of the Constitution. The Establishment Clause could be open to interpretation and states that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof” (U. S.

P1-1.    a. Calculate the tax disadvantage to organizing a U.S. business today as a corporation, as compared to a partnership, under the following conditions. Assume that all earnings will be paid out as cash dividends. Operating income (operating profit before taxes) will be $500,000 per year under either organizational form. The tax rate on corporate profits is 35 percent (Tc = 0.35), the average personal tax rate for the partners is also 35 percent (Tp = 0.35), and the capital gains tax rate on dividend income is 15 percent (Tdiv = 0.15).

Regardless of all facts on taxes about the advantage and disadvantage, it is more practical if we include more opinions on how the nation handle taxes in this centuries. Due to there are different perspective in each of every people, some people may not prefer having tax money and more to keep all the earning to themselves, and half of the nation might agree on federal government is not fair due to the percentage that has given to the citizen. But however, there are also some people who cared more for their tax money because they still believe it can save the economy not to themselves.

Tax system is a legal system of imposing and collecting taxes from the citizens of the country. As it has been stated by Albert Einstein, the hardest task in the world is to understand the tax system of a country. The United States’ tax system is so complicated that its tax code contains almost 3 million words and 6,000 pages. Moreover, the taxes implied by city and state governments add more complexity to the federal taxation system. In this case, we do not need to understand the complexity of tax code system in order to get acquainted with the significant role of taxes in American society.

I’ve summed up the introduction of Taxation to these slight words. Taxation is defined as a way that the government able to generate or collect revenue from the citizen of one’s nation through different sources. As what I’ve learned from Taxation course that there are two types of taxation, direct which are paid by the taxpayer directly to the government, and indirect which are collected by an intermediary (like a retail store) from the consumer. The intermediary who will file the tax return later and forward the amount of the money to the government with the return. This tax is applicable to organizations and individuals. In this reflection, I would like to highlight what I learned of business and individual taxation, the experience on working with a group for the project and what challenges I faced and how I was able to get past.

As there is no clear definition of income and taxability thereof, which is accepted internationally, an income may become liable to tax in two countries.