Essay on Tex Reform

Submitted By wdarn
Words: 1349
Pages: 6

Tax Reform Racket

First and foremost let us begin by clarifying that we are by no means economists. However, we are United States taxpayers, and we know us as well as our neighbors are being robbed. For a better understanding of this let us look at a few areas that led to this. These areas include Article I section 8 of the U.S. Constitution, the U.S. Civil War, and the 16th Amendment. Article I section 8 of the U.S. Constitution authorizes the power, The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States. ("Constitution of the United States - Official") This is all well and good, however things start to get a little heated in America come 1861. Unfortunately we split and Civil War began and come 1862 America needed a way to finance a war against itself. Thus came the federal income tax, also know as the Revenue Act. Though the Civil war contributed to one of the greatest social victories of mankind it has led to the beginning to America’s loss of liberty. (Edwards) In April 1865 Uncle Sam Removed the chains of slavery in the U.S. on African Americans then in 1913 applied them to all Americans the 16th Amendment. Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration. ("Bill of Rights") From that point till now our government has instituted more taxes, raised income tax rates, increased national debt and expanded national governments role in society. This great expansion has lead to great burdens on American people and American industry. These tax institutions have decreased the wealth of the people and forced companies to escape and evade these burdens to other countries. Our current Tax System encourages companies to relocate outside U.S. borders through tax write offs of all business expenses, which include moving production outside the U.S. ("Fact Check: Tax Break for Shipping Jobs Overseas? Well, Sort of") In addition to these breaks it also bares such a heavy tax rate on corporations it encourages companies to maintain profits outside the U.S. and to invest in foreign operations. ("Mercatus Center”) The current Tax System, instead of encouraging economic growth and increased revenue in America has only caused stagnated growth. One of the best ways to reverse and correct the damage of an outdated Tax System is through Tax Reform. Tax Reform has not been done since 1986 and has become a largely discussed topic in economics and public policy today. (Kent)
Through these discussions many different solutions have come to fruition. All of which have varying benefits and limited foreseeable consequences. Some of these ideas include the Hall & Rabushka Flat Tax, Fair Tax, and a Value Added Tax. The Hall & Rabushka Flat Tax proposal would create a flat standardized tax at 17%-19% on all income earned through wages, retirement distributions and unemployment above a certain point. However, capital gains, social security, interest and dividends would be tax exempt. This creates a larger tax base, but critics are skeptic if it can bring in enough revenue. (Gale) The Fair Tax proposal is a national sales tax of 29% on all purchases. Eliminating the need of corporate taxes, individual taxes, estate taxes and pay roll taxes. Exemptions would be made for business assets and investments. Critics scoff at its simplicity and again feel it would not generate enough revenue. Lastly would be to add a Value Added Tax. This would be a tax on everything all purchases from producer to seller to finally the consumer. Critics for this feel that sellers would add the tax into an items cost for consumers causing inflation. (Taylor) Since there are so many options available a solid blending of these…