Tax Reform In The United States Economics Essay

evaluate Reform In The linked States Economics EssayThis research c all over discusses the theme of evaluate mitigate in the linked states. Nowa sidereal days this issue is an actual one. M any(prenominal) Ameri rats ar gratifyed greatly in this issue and even express their in-person opinions on this topic. The research newsprint discusses different problems with the current impose corpse and represents some roots concerning some changes in the US impose reform.Key lecture tax, tax placement, tax reform.1. IntroductionIt is impossible to carry out sassy transformations for the purpose of steady climb upment of the economy without formation an effective tax system. revenue reform is a process which changes tax policies of the grown medication. It is cognize that on that point be different goals of this process such as reduction of the tax level of all the large number, changing tax system for more than(prenominal) reformist effect, simplification of tax system. A good tax reform can improve the life of many people.1.1. Significance of the studyThis research paper discusses one of the well-nigh important issues in the development of the scotchal system tax reform. This issue is an actual one not completely for the united States but for any country of the world because financial sector plays a key piece in the present day development of the economy. revenue reform is a main tool of the government activityal concur. In the consideration of tightening business competition there is a necessity to hold in appropriate measures in getting over the consequences of the financial and economic crises 2008-2009. So, tax reforms have such functions which bequeath help to stimulate economical return and innovative activity, and to attach social protection.1.2. Definition of termsIn parliamentary law to conduct a good research on tax reforms it is necessity to represent some economical terms which will be utilize in the process o f research. They be the following ones tax revenuees are stomachments which are do by the natural and legal persons (enterprises, organizations and citizens) for the government revenues in mandatory manner. It is a duty of everybody to pay taxes. evaluatees are necessary because by means of taxes the government has an opportunity to control some economical processes in the country.They help to develop and reduce some kinds of business, to guide the development of these or those brunches of industry, to influence the economic activity of some enterprises and organizations, to balance consumers supply and demand, to regulate the amount of specie in circulation.Tax system is the total of taxes, fees and former(a) obligatory payments which are cookn according to the legislative acts. The main characteristic features of any tax system include the following onesthe total of taxes fixed by the governmentthe complex of principles, forms and methods of their putting into operationthe s ystem of tax authorities, forms and methods of tax controlrights and duties of the participants of tax relationsorder and conditions of the tax process. (Roach, 2006)2. Discussion themesThis research paper touches upon the themes which are closely connected with the topic of the paper. It discusses issues and problems with current system in the United States. Moreover it gives some new ideas for tax reform.2.1.Some Facts from the history of Tax Reforms in the USAAccording to the historical data, there were a trade of various front lines in the USA which had the main goal to reform the solicitation and the management of taxes in the country. Thus, the Whiskey Rebellion which took place in 1799, is considered to be the first effort to carry out tax reform in the USA.From the historical sources we learn that George Washington who was the US President at that succession sent about 13000 troops to the western part of the state pascal in order to put down the rebellions. Another pre gnant elbow grease against tax reforms took place at the end of the 19th century. henry George, who was an neat American economist of that time, was at the head of that apparent motion. The main goal of that movement was to abolish all forms of tax revenue other than the Single tax on land values. He offered this single tax in his book shape up and Poverty in 1879.This plan was not put into practice although it got support. This movement on tax policy was spread not only in the United States but too on Australia and New Zealand. However, the organization which is called The Henry George Foundation of America continue to promote this form of taxation reform. (Barker, 1985)It is gon that some(prenominal) organizations in the United states are engaged in tax reform in the country among which are Americans for Tax Reform, Americans for Fair Taxation, Americans for trustworthy Taxes. These and other organizations have already promoted some ideas concerning tax simplification in t he United States which include Flat tax plans, Fair tax and two-part tax reform proposals. (Tuerck et al., 2007)2.2 The Structure of Taxation in the United States and its heartIt is known that the system of taxation in the United states is a forward-looking one. It means that the per centumage of income which is nonrecreational by the household will increase with the increasing income. In other words those people who earn more will pay a higher prize of taxes. here is an patternA person earns $100,000 a year, he will pay 25% of it $25,000.A person earns $30,000 a year, he will pay only 10%tax rate $3,000.However, there may be likewise regressive and proportional tax systems.Some Reasons for using the Progressive tax system in the USAProgressive tax system stands for the idea that those people who earn more should pay more tax rate because they have more opportunities to pay and they will not forego the most necessary things such as health care or pedagogics. drop-off of inequalities in the society. (Roach, 2006)2.3. Different types of taxes in the USA in that respect are several different types of taxes in the United States. All these taxes are collected by the Internal Revenue services. They are the following onesIncome taxesCorporate taxes. These taxes are establish on the companys income per a financial year.Investment taxes. These taxes are usually paid when a person receives some dividends and capital gains. (Smith, 2010)There are also some other types of taxes which are paid by the individuals income tax, sales tax, plaza tax, social security tax, medicare tax and others. (McIntosh 2010)Taxes on business include national which include four groups income, self employment, payroll and excise, state which include putting surface state business taxes (sales tax, employment tax and business income tax) and local which are collected by cities and counties in order to supplement services for this or that area. (La Rose, 2010)2.4. Problems with the Current Tax System in the United StatesThe US Tax System is considered to be a complex one. It has its peculiarities which differ it from the tax systems of other countries of the world. However, the US Tax system has both advantages and disadvantages. The last ones require certain changes. Here is the list of problems with the current Tax System in the United StatesA fabulously complex tax system with numerous layers of taxation on the same money taxes on income and salaries, ans savings. According to the statistical data, four of five position-class Americans pay more in payroll taxes than in income taxes. (Walby, 2008)High rate of unemployment (about 10,3 million persons).Little of the mortgage interest deduction refer to those people who are at low and middle level of income.(Walby, 2008)About 18% of taxpayers have got out of the system. The income taxes fail to take the cash payments and other unjustified transactions concerning illegal immigrants.The income taxes assist imports over the US production by excluding imports from Us tax and it penalizes the US exports giving an opportunity to some foreign countries to impose taxes when our goods are delivered to their shops. This fact regaining the US exports and even costs the Americans their jobs. (17% price advantage over the US goods.)(Tuerck et al., 2007)The income tax system puts the highest corporate tax rate enforcing companies to be primed(p) in other countries.Great problems with education, many students do not know about the financial aid which can be given to them. College education became too expensive. College graduates have debts of more than $19.000 when they leave college.A great lie with of manufacturing jobs were lost due to breaking out the US manufacturing trade deficit. (Arduin, LafferMoore Econometrics, 2006)2.5. hearingInterviewer Hello What is your attitude to the present day tax system? atomic number 18 you satisfied with it?Mr. Brown, an engineer/49 years old Good day I sound off I pay too much in taxes.Mr. Wilson, a doctor/29 The Tax Code is too enigmaticMs. Whinthrop, a manager/41 I pay through the schnozzle on income and payroll taxes and they say we still dont have balanced budgetsMs. Hartcoph, a student/20 I think rich people do not pay their fair share.Mr. Carack, a worker/27 Oh, pocketable guys like me cannot take advantage of the tax code like those people who earn much and corporations do.Ms. Curts, a pensioner/71 You know, fifteen percent of Americans do not pay any income tax any moreMr. Bronks, a builder/38 Our current tax system taxes the light but not the rich. The programs are all for the benefit of the rich and on the backs of the poor.Analyzing the above mentioned interview, we can say that many people are not satisfied with the current tax system. They consider it should be changed. Most Americans occupy fair Tax plan. (Kotlikoff, et al., 2006)Some words about the main idea of this plan. The Fair Tax is a proposal to replace the following taxes as the federal official corporate income tax, the federal payroll tax, the federal estate tax, the federal gift tax, the federal generation-skipping tax with a federal retail sales tax, assessed at a single rate. The Fair Tax guarantees a discount to each household which will be based on its demographic composition. The main idea is that the rebate ensures that households who live at or infra the poverty line in the United States will pay no taxes on net income. (Kotlikoff et al., 2006)2.6. Some New Ideas for Tax Reform in the United StatesOf course, it is very difficult to judge but I think that there should be some changes in the tax system of the Unites States. Here are some ideas for tax reformThose countries which supply the United States with their products (for example, China) should pay more for import of their products.It is necessary to replace the existing federal Tax Code of the United States into a more simplified version.It will be good to impose no taxes on export and corporate gelt in order to save jobs and to make the US companies more competitive.There should be no taxes on education tuition fees.Non-filers should pay taxes when they bargain for goods or use services.Those who get low incomes should not pay any taxes.3. ConclusionIn conclusion, it is necessary to say that taxes play an important role both in the economy of the country and in the life of citizens. Tax money is used by the government to run the most significant activities. This money may also be invested in some projects which will be beneficial for all the citizens of the country. It is very important to have such a tax system in the country which will be appropriate for citizens of all the levels of income and will allow all of them to live a full life. That is why we need tax reforms.