The founder of our nation rejected the idea of an income tax. During the civil war an income tax was first introduced, and repealed shortly after. Since 1892 Americans in all income brackets must pay income taxes. The income tax in America uses the progressive system. This means the more you earn the more that is taken from you.
April is the month that every person in this country, that earns income, must file a tax return. Racing to fill out forms, filing in circles, and punching numbers in the calculator, filing taxes is a process full of headaches. The current tax code at over 50,000 pages is about 7 times longer than the bible.
Progressive taxation taxes a large percentage of income from the upper income earners and an incredibly minimal amount from half of our countries working class. In the article Relying.. on Top Earners Very Risky for U.S. author JT Young says,” The share of income taxes paid(in 2006) by the top 10% of earners was 70.8%, while the bottom 50% paid -0.3%.” This means that more money was given out as refunds than collected for half of Americans. Those statistics are staggering to anyone and not just economists. If half of our county actually makes or breaks even while filing for taxes it is clear that our country depends on the wealthy population to provide for the survival of our government.
The progressive tax gained support during President Roosevelt’s administration (Fulmson). Roosevelt best described progressive taxation as a “war of the poor against the rich.” Roosevelt used his heavy progressive tax to solve many of the problems that existed at that time. Roosevelt’s use of the progressive tax has since been used to finance thousands of government programs and fund our expensive growing government.
The consensus of economists is that progressive taxation is the best form of taxation. The reasons why economists think this way can be explained in one simple reason. Upper income families have more discretionary income (money left over after paying for the essentials for survival). When you have more discretionary income you can afford a greater tax burden. This can be argued because if you took the same taxes from a family just meeting ends meet you would take away from their ability to survive.
Progressive taxation encourages illegal activity. The underground economy of working for cash and off the books allows for many people to live untaxed. When you work off the books your labor according to the government did not happen. Working off the books means that you are not paying taxes. Billions of dollars every year is not collected by the government because of this illegal activity. The current tax system is 100% voluntary and depends on individuals taking the step forward to pay their share.
The fair tax is a system where every person in this country would pay a flat ~28% tax on all goods purchased. The price of all goods purchased in stores would drop in price because all of the indirect taxes like the payroll tax would not be added to your item. People living below the poverty line would be exempt from this flat tax. Every dollar you earn at work you would keep. The fair tax is the best option because it is fair.
Burton Folsom Jr. "The progressive income tax in U.S. history. " Ideas on Liberty 1 May 2003: 38-39. Social Science Module. ProQuest. W.W. Hagerty Library, Philadelphia, PA . 10 Feb. 2008 http://www.proquest.com/
J T Young. "Relying So Much on Top Earners Very Risky for U.S. " Human Events 29 Oct. 2007: 7. Social Science Module. ProQuest. W.W. Hagerty Library, Philadelphia, PA ***. 10 Feb. 2008 http://www.proquest.com/
"THE FAIR TAX SOLUTION: APRIL SHOULDN'T BE ABOUT TAX CODES AND HEADACHES. " US Fed News Service, Including US State News [Washington, D.C.] 29 Jun 2007, General Interest Module. ProQuest. W.W. Hagerty Library, Philadelphia, PA 10 Feb. 2008
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