StudentShare solutions
Triangle menu

The Flat Income Tax - Case Study Example

Nobody downloaded yet
In addition, all taxpayers would be given a liberal personal deduction These changes in our tax code would simplify the administration of taxation, be more fair, generate greater revenue, and stimulate the economy.
One of the biggest complaints about the current system of taxation is its overwhelming complexity. The myriad forms, schedules, and attachments required to even file the most basic income and expenditures is beyond the capability of the average taxpayer. The Internal Revenue tax code contains more than 9.4 million words, thousands of provisions for business and individuals, and an instruction booklet that is over 100 pages in length (Graetz 49). The flat rate income tax form would have only the demographic information and lines for income, personal deduction, tax rate (17 percent), and total taxes. By eliminating the tables, worksheets, and schedules, anyone could calculate their taxes in a matter of minutes. Steve Forbes, former presidential candidate and president of Forbes Inc. argues that, "The flat tax is the only way to bring back sanity and put an end to the clutter, confusion, and distortions of the current system" (58). The flat tax would not only save the taxpayer countless hours of organizing and calculating their yearly taxes, the IRS would save a significant portion of its budget by reducing the time it takes to collect, examine, and audit the returns.
The simplified system of the flat tax would also be more fair to all taxpayers. All taxpayers would pay an equal percentage of their income toward taxes, without regards to income bracket or economic class. This would eliminate the ongoing criticism of tax breaks for the wealthy and eliminate the public's distaste for the upper income people who currently pay no taxes. This debate has sparked class resentment among the voters, and Fuest, Peichl, and Schaefer contend that, "Tax simplification concerning the determination of income for tax purposes [. . .] reduces inequality and polarisation" (88). In addition to an equal tax rate, the system's fairness would also benefit from the elimination of the special provisions and loopholes that are afforded some specific industries and individuals.
Tax credits and exemptions for special interests such as oil exploration would no longer exist and would eliminate the inappropriate economic engineering that the tax laws do to the free market system. The revenue system is designed to generate revenue and not construct the economy. Loopholes are awarded to special interests and have more to do with social and political concerns than they do with raising revenue. The progressive tax system, and its high marginal tax rate, is often seen as an acceptable method for the redistribution of wealth from the upper classes to the lower classes. Not only are high marginal taxes unfair, Zolt and Bird contend that this concept is outdated and "'most analysts and policymakers had come to believe that high tax rates not only discouraged and distorted economic activity but also were largely ineffective in redistributing income and wealth" (8). Tax credits further disrupt the intentions of the free market by subsidizing activities that would otherwise be unprofitable. This may be in the form of social programs, such as a deduction for charity, or a tax incentive to develop a new technology. Either way, the flat tax would ...Show more
Cite this document
  • APA
  • MLA
  • CHICAGO
(“The Flat Income Tax Case Study Example | Topics and Well Written Essays - 1500 words”, n.d.)
Retrieved from https://studentshare.net/sociology/282204-the-flat-income-tax
(The Flat Income Tax Case Study Example | Topics and Well Written Essays - 1500 Words)
https://studentshare.net/sociology/282204-the-flat-income-tax.
“The Flat Income Tax Case Study Example | Topics and Well Written Essays - 1500 Words”, n.d. https://studentshare.net/sociology/282204-the-flat-income-tax.
  • Cited: 0 times

Summary

The income tax in the United States has evolved from a simple system designed to generate revenue to a complex process of economic engineering and politicized monetary management. In an effort to implement the complicated maze of US tax laws, the Internal Revenue Service (IRS) has grown to become one of the largest bureaucratic institutions in the world…
The Flat Income Tax
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the case study on your topic
"The Flat Income Tax"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Tax law
Also addressed will be the potential income tax ramifications personally to Mr. Jones, and the potential merger or acquisition of Smithon by Johnson Services. Other interests being addressed are, the potential use of Johnson stock to fund the purchase and the effect a merger would have on the ability of Mr.
4 pages (1000 words) Case Study
Tax Claim Advise Letter
First, it is important to address your residency for tax purposes. As you are aware, for one to fall under the jurisdiction of Australia for tax purposes, they must have been residents during the income year. With regards to taxation, residency does not necessarily imply domicile or nationality.
5 pages (1250 words) Case Study
Taxation Master Case Study
Tax year means that only those incomes obtained from employment from 6 April in one year to 3 April the next year shall be the basis in computing your income tax thereafter. For example, in computing your income tax liability from employment for 2008/2009, we shall consider your income received from 6 April 2008 to 3 April 2009.
20 pages (5000 words) Case Study
Capital Gains Tax Liability
First of all, you own 50% of your property. This is equity. With equity you can do many things, such as make purchases against your equity. The fact that you have a house on the beach in Marmion also helps you in the sense that you completely own (jointly, I might add) a residence.
6 pages (1500 words) Case Study
America's response to the Flat World
“The playing field has been leveled” as said by Nandan Nilekani to Thomas Friedman, which made him, write the book The World is Flat: A Brief History of the Twenty-First Century. The current situation of the world’s economy has shifted from the traditional notion that the global economy is monopolized only by the elite few.
14 pages (3500 words) Case Study
The calculations for the capital gains tax
Major changes have been brought in the budget for the year 2008 in respect of the capital gains tax. The indexation allowance and taper relief which have so far been allowed are withdrawn and in that place a flat rate of 18 percent of the chargeable gains has been introduced.
10 pages (2500 words) Case Study
Income Statement
4 pages (1000 words) Case Study
Tax planning clients
It is important to note that the main purpose of this provision is to reduce the individual tax liability. With the availability of this account, the couple are would set aside a
4 pages (1000 words) Case Study
International Tax
China now boasts as the second world largest economy and s first place spot in the economy of art; this fact is further underscored by some of the artists – ten in number - recognised as bestselling of the year
10 pages (2500 words) Case Study
Taxation project 01
Sandra’s personal marginal tax rate, given her other sources of income is 39.6%. Q 1: if Sandra operates the business as a sole proprietorship, what is the annual after tax cash flow available for reinvestment in the business venture? Since the
4 pages (1000 words) Case Study
Comments (0)
Click to create a comment
Let us find you another Case Study on topic The Flat Income Tax for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us