Reducing the Tax Bite The tax impact on dividends as well as interest sustained in many ways like owning stocks in an account that is tax free, or by holding stocks that increase in value with time and pay no dividends. Tax Issues it is being argued that the tax structure enforces an extremely high percentage which makes it extremely difficult for corporation in the United States of America to attract investors and raise capital. This in turn has a linchpin affect because no new jobs are created and the entire economical development process is hindered. It is believed that the tax rate needs to be lowered from the current 35% to make the economy more sustainable. Tis argument is supported by the fact that tax rates in the U.S have been reducing for 30 years now but the corporate tax are at an all time high. They point out that in the last decade alone, many countries have reduced their corporate tax rate to make their economy more competitive. However, all is not sunny and there are several large4 companies, 1000 at least which are not paying their fair share of what they owe to the government in form of taxes. Critics argue that large corporation use their endless supply of resources to make unfair usage of tax shelters as well as find minuscule loopholes in the existing tax law to avoid paying the fair amount of tax. It is for this reason that amidst the extremely high corporate tax rate. The revenue generated by these corporate tax is constantly declining from a 6% of the economy in the 19th century to a mere 2%. On the other hand, returns that individual investors earn remain steady. The way that these issues will be solved is at the moment not very clear even though what is certain over here is that corporate taxes are definitely supposed to be one of the federal legislative agenda particularly in the short term. There is a dire need to simplify the structure in order to highlight that the tax code simplicity is an overriding majority in the administration of taxes. The tax code that currently exists makes compliance difficult and also requires tax payers to spend an extra amount of time for preparation and filing of returns. It also obscures the level of comprehension which means that it leaves tax payers clueless about how the taxes and their rates are computed and applied in different situations, and what exactly is the role of the taxes that they pay. In addition to this, they also facilitate the avoidance of tax by ensuring that tax payers are able to reduce their tax liability to provide criminals with opportunities of indulging into tax related fraud. In addition it also gives the impression that tax payers are not compliant to rules and regulations which ultimately reduce the incentives that honest tax payers feel for the need to comply to these rules, and it makes them more de motivated and vulnerable to fraud. The report has also stated that tax codes impose a very high amount of burden on the tax payers. Since the year 2001, Congress has made several changes to the tax code at an approximate average of about one per day (Shaviro, 2011). Particularly, it has been pointed out that it takes the US tax payers to pay more than 6 billion US Dollars per hour for compiling the tax code in the year 2010, and it is also said that about nine out of ten Americans are reliant on professional or some kind of other commercial
Taxes and Investors The interest charged by corporations is of great interest to the investors for this is means of raising capital with debt instead of equity. Nothing compares to the tan reduction of dividends that is paid to the shareholders. Tax on dividends is paid twice, once by the corporation and then by the shareholder himself…
You can analyze certain aspects of taxation in respect of: 1. How does taxation affect a business after incorporation- its pros and cons. 2. Setting up of a company on equal shareholding basis and retaining Chloe as Company Secretary and finally, 3. Tax efficient profit withdrawal.
This paper will examine tax reforms in the US, discussing pertinent issues like corporate tax loopholes, benefits of corporate S status, gift tax laws and abolition of estate taxes. This paper shall provide alternatives to the federal system of taxation. Tax reforms are essential to the realization of corporate and national growth (Shapiro, 2005).
The responsibility of IRS includes collection of taxes in US and enforcing the Internal Revenue Code that is framed by the US federal government. Currently IRS has divided its interest and audit functions under four divisions, namely the Large and International Business, the Small Business and Self-employed, Wages and Investment division and the Government organizations (exempted from tax).
Through publication of annual finance act and the budget, the government can be able to achieve environmental and economic goals (McCluskey et al pp.4-5). Consumption tax may be levied on goods and services consumed .This system may affects consumers spending behaviors.
A sound tax system possesses the following characteristics: 1) fiscal adequacy which means that the revenue raised is sufficient to meet the needs of the government; 2) administrative feasibility which means that the tax code must be clear and concise, capable of proper enforcement and not burdensome, convenient as to time and manner of payment; and 3) theoretical justice which means that it must be based on ability to pay by the taxpayers (Domondon 2003, p.
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.
se it affects staffing time and budget allocations, and there is also the worry that nurses who have worked consecutive twelve hour shifts may become exhausted and compromise patient safety. From the perspective of many nurses, however, flex time has many benefits, since it
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
The double taxation treaty has been introduced in order to minimize the issue related to introduction of tax rate on a uniform basis. This treaty is introduced with the purpose of preventing tax evasion. The model tax convention has been adopted by
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