Name: Institution: Tutor: Course: Date: Reforming the US tax Code to Eliminate Tax Credits Introduction Tax reforms involve the alteration on the manner in which taxes are collected within a country to boost the economy and avoid tax credits. This involves the methods of redefining the tax collection and management of taxes with the motive of meeting the targeted efficiency on tax remuneration within the country…
The goals of the reforms on the taxes is to realize the objectives of the National Commission on Fiscal Responsibility and Reforms, whose major goal is to give the people responsibilities related to the growth of the economy in accordance with the level of affluence (Becerra 45). My Position on Flat Tax Rate Flat tax rates imply that the people pay the same amount of tax regardless of their level of income. When the tax rate is constant, all the taxpayers are to be subjected to the same amount of tax without deductions or exemptions. According to the Americans Bill on the reforms of the tax code, flat tax would broaden the tax base while enforcing that every individual pays the tax without any deductions. The flat tax rate payment would benefit the people in various dynamic ways such as it would spread the burden of paying the tax on every citizen in the country. In essence, the flat tax rate if adopted would increase the burden on the middle class incomers while relieving the richest. As a result of that it would not be considered as a fair way of building the economy as the rich who use most of the economic resources are not taxed according to their level of affluence (Diamond & George 140). ...
One of the advantages for lowering the tax rate is that it increases the revenue to the state: the disposable income of citizens increases thereby presenting more money into the government’s account to be used in enhancing economic growth. The provisions contained in the act of lowering the tax on the low incomers is that, the government posed into a situation where it cannot waste its expenditures as the procedures of the government strictly looked into (Jones, John & Teresa 13). On the other hand, the service delivery to the people may be poor; for example, the prison and other welfare activities in the social systems. The government may fail to offer some of the fundamental services to the people as they may not collect the required minimal revenues that can efficiently meet the social needs of all in the country. As the tax rolls decrease, the ability to accomplish such projects lessens. Consequently, the rich may seek for ways to evade the tax as the state may seem biased towards them. The notion is that, it is only the middle class earners who are the favored in the context of tax collection, and the amount of tax levied upon them. Basically it may seem unfair but, in a rational point of view the rich should pay as much as they consume in the economy (Lymer & Lynne 75). The impacts of lowering tax on the low incomers and increasing the same on the rich Economic development based on the level of affluence of the people should be rationally distributed with regards to the people’s levels of affluence. The rich should heavily pay taxes in that they utilize most of the economic resources while the poor hardly get the platform to do the same. Fairness in the tax distribution and levies in a rational point of view imply that, those who leave a huge economic ...
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The current paper aims to evaluate and present corporate tax system, double taxation of corporate profits, progressive system of taxation and provisions on tax expenditures. The paper will make recommendations in an effort to continually develop and improve the tax system of the United States of America.
Tax avoidance is a means to escape from taxation, which is allowed and sanctioned by law. A taxpayer committing this will not be legally held civilly or criminally liable to the government provided it is used in good faith and within the process allowed by law, otherwise the taxpayer will be committing tax evasion which is a crime.
Specifically, governments throughout the world are attempting to preserve incentives built into taxation to maximize economic efficiency. At the same time, these governments are trying to cope with the growth in social welfare programs throughout the past three decades.
Businesses need tax planning to help implement strategies that would lessen their tax liabilities for the year ahead. There are numerous tax planning strategies available to business owners. Regardless of how simple or how complex a tax strategy is, it will be based on structuring the business transactions to accomplish anyone or more of the following goals: 1) reducing the amount of taxable income, 2) reducing the tax rate , 3) claiming any available tax credits, or 4) controlling the effects of the Alternative Minimum Tax.
ng into these taxes, we need to understand the records to be maintained for an ongoing business concern or a proprietorship concern for that matter getting converted to a company format. These include:
Formation of a company has major benefits in terms of liability of partners
Although taxation should be done on an equal level, government departments are considering a reduction for the middle class and an increase for the wealthy. The changes in tax systems are indicators of economic development of the US and other countries.
Gross income illustrates the total income earned by individuals; for example, basic salary plus allowances. Several tax returns deductions are subtracted from gross income to form the AGI, for example, medical deductions. Taxable income is calculated by subtracting itemized deductions and also personal exemptions, from the adjusted gross income.
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