The Tax System Of The United States

There are three different types of tax systems presented in this article: Progressive income tax, Flat tax, and the Fair Tax. The progressive tax system is what we have in the US and is common in countries across the world. It bases the percentage of income tax you should pay by the amount of income you receive. Basically, if you have a large income then the rate of tax you will pay is larger and, furthermore, if you have a low income you will have a lower rate to pay. Many conservatives dislike this system because it forces the top percentage of taxpayers to pay a majority of the tax revenue. “According to the Tax Foundation, the top 1% of taxpayers have consistently paid more in federal income taxes than the bottom 90% since 2003…” It treats people differently and it allows for

progressive tax code, employed by the United States, and is fair as the wealthy pay a higher

With the ever-increasing complexity of the United States tax code, it has become more important than ever for companies to understand and implement possible tax benefits for the company and its employees. One major benefit that applies to both is employer-provided meals. Employer-provided meals have become a major topic due to their double-sided benefits. These are both tax beneficial to employers, as the meals can be deducted by the business as an expense on its federal income tax return, which reduces the business’ tax liability. Concurrently, the benefit of the provided meal is excluded from the taxable gross income of the employee, providing the employee with a tax-free benefit. After fully understanding the laws related to employer-provided meals, a business could begin thinking about implementation of the benefit.

In 1913, the 16th Amendment gave Congress the power to tax income, no matter the

In a Progressive Tax system, a larger percentage of income is taken from those who are wealthy or have a large annual income, in taxes. Those who have low incomes do not have as high tax percentage to pay because progressive tax is based on

Politics is the process in which negotiation and resistance is utilized to establish a stable society. In contrast, the current United States tax system fails to form such solid grounds. Without such a complex system, anarchy and chaos will overrule the goal of fairness that is favorable to people. Taxation is a branch of politics that is distorted in some ways in which it does not satisfy many people’s needs. Although a government is designed to run an organized society and meet the needs of citizens, it does not always do a great job. Many people feel that their place in the financial world grants them immunity from excessive taxes while others feel they are being hurt by such an unequal tax burden. The purpose of taxes is to benefit society as a whole and keep the government running, but it is not working properly and efficiently. People’s various situations make it difficult to implement the current tax system. Taxation has long been deliberated, and the issue holds many points, such as income, a person’s age, and where they live, these circumstances are unequal and unfair to many people.

It is a common believe that as the people of the United States we are free, and taxes are limited. Something that has come to the attention of the Government is we are running low on tax income. Taxes are a vital part of the United States and our way of life. Unfortunately the government of the United States believes that it’s tax revenue is substantially less than what they can pull out of the average citizens wallet. The problem is, they want to squeeze every last dollar out of American Citizen.

Currently, Americans pay taxes on a horizontal equity, which means that they pay about the same amount as other people with the same standard of living. (Burman 163) Although horizontal equity may sound alright on the surface, it is not as equal as it sounds. According to the new tax rates that will be effective in 2018, individuals making anywhere from $9,526 to 38,700 will pay twelve percent in taxes to the government. Individuals who make over $600,000 will pay thirty-seven percent of their income in taxes. Although many argue that it is only fair for wealthier people to pay more in taxes, it does give not the wealthier an incentive to make more money. For example, Jack and Mary graduated college last year and got married. If the two of them make $75,000 together, they will owe twelve percent, or $9,000, to the IRS. If the next year, they make $80,000 together the next year, they will owe twenty-two percent, or $17,600, to the IRS. Although Jack and Mary made more money, they will have less money after taxes because they jumped up to the next tax bracket. Horizontal equity actually discourages families from making more money, which in turn could result in the government losing

America might never have been an independent country if it weren’t for Great Britain's seemingly overbearing taxes. The colonies were adamant that taxing them was unfair as they were not being accurately represented. This grew into such a problem that it was one of the driving forces for independence. They fought for eight years to win it, and soon after established their own set of taxes. Tax rates have fluctuated since they were first implemented, but have always been based off the same progressive system. In a progressive tax system, those with more income contribute more, while those with less contribute less. This system has changed with us over the years, however, though there is no thought of starting a revolution to change it, its faultlessness

If Oliver Wendell Homes once said ”Taxes are the price we pay for a civilized society” (Spilker et al., 2014, p. 1-3), then progressive tax would be the perfect tax structure to choose. This is a system where the tax rate increases as the taxable base increases as well. As we recall from history, President George Bush had enacted a tax cut from 2001 – 2010. Over this ten year Americas wealthiest had received tax cuts totaling almost half a trillion. By 2010 while Bush’s tax reductions were still in place 52 percent of the tax cuts had gone to the 1 percent richest whose average income was 1.5 million “Their tax-cut windfall in that year alone will average $85,000 each” ("Tax cuts for the rich," June 12, 2002, p. 1). Subsequently we

is a progressive tax system. A progressive tax system takes a bigger share of income from high-income citizens than from low-income citizens. On the cover, this sounds like a good system but, it actually hurts the saver. If a family earns $40,000 a year, for example, they get taxed once on their wages and salaries before they even receive the paycheck. If that family decides to save the paycheck, whatever is left over is taxed again on the dividends and interest they earned on the savings. This double taxation discourages investment and saving, in the end, it makes it harder for families to save for certain milestones in their life, such as retiring or saving for their child’s education. The current double taxation of income and savings makes it more expensive for a business to attain the financial resources needed for new technologies and equipment which, increases capital in the long

Taxes are considered to be progressive, this is how the super rich are getting large tax breaks. The IRS has found that as the rich, the top one percent of the nation, become even richer beyond this point, the amount paid in taxes decline. A person

Also, if the government wanted to raise more revenue through raising income taxes, and there was a flat income tax system in place, they would have to raise the income taxes for everyone across the board. Now, let’s look back the example from earlier where person one made $50,000 and person two made $100,000. Remember, they both payed the same percentage of their income in taxes, which was 10%: person one payed $5,000, person two payed $10,000. Some people will say that this way of taxation is unfair because the $5,000 means more to person one than the $10,000 means to person two. Regardless of whether the $5,000 means more to person one than the $10,000 means to person two is true or not, they are being treated fairly because they are both paying the same percentage of their income. The flat tax has good points like its simplicity and ability to stimulate an economy, but it also has weaknesses like its inability to be flexible after implementation and the possibility of putting even more of a tax burden on lower income families. Let’s move on to the third and final tax system to be covered which is no income

Taxation can be traced back to the colonists, when they were severely taxed by Great Britain on multiple items from tea to business documents that were mandatory to be stamped by the Stamp Act. Throughout the history of the United States, the tax system has evolved dramatically. Initially tariffs, or taxes, provided the primary source of revenue for the government. Consumption and Income taxes were announced years apart from each other. Consumption taxing was first developed in 1974 by William Andrews. While Income taxing was first developed in 1894 and was passed by the Wilson-Gorman tariff. Both taxes were made for completely opposite reasons. Income taxes were originally made to help pay for any revenue that would be lost by tariff reductions.

The current system, the progressive income tax, is popular because it is essentially exactly what it sounds like, i.e., the tax rate that anyone pays rises, or progresses, as income increases. In fact, such a progressive income tax system can be created even when the rates remain flat through the use of personal exemptions, tax credits, and tax deductions which essentially change the tax rate that is in effect (Erb.) People tend to like progressive tax rates because they are a way of raising revenue by taxing people who have the