Higher Incomes And Proportional Tax example essay topic

320 words
A tax is a charge against a citizen's property or activity for the support of government. The concept of withholding tax was invented around the time of World War II by Chairman B. Ruml. He wrote an article which appeared in "American Affairs" in January 1946 which explained what taxes are really for. Ruml stated that federal taxes can be made to service four principle purposes of a social and economic character: as an "instrument" of fiscal policy to help stabilize the purchasing power of the dollar, to express public policy in the distribution of wealth and of income, to express public policy in subsidizing or in penalizing various industries and economic groups, and also to isolate and assess directly the costs of certain national benefits such as highways and social security. The purpose of taxes is to raise revenues, influence behavior, and promote fairness. To be effective is equitable, simple, and efficient.

There is also a philosophy of taxation. This includes Benefits-Received Principle - those who get the benefits from services should pay for it and Ability-to-Pay Principle - those who can afford to pay more should pay more. There are also three different types of taxes. Progressive Tax, which takes a larger percentage of income from higher incomes than lower incomes, Regressive Tax, which takes a larger percentage of income from lower incomes than higher incomes, and Proportional Tax (Flat Tax), which takes the same percentage from all income levels.

Although the Federal Tax System is intended to be good for us it is bringing nothing but problems for us. We don't know where exactly our money is going or even if it will benefit us in the future. We " re finding all sorts of problems in many fields such as medical, retirement plans, education etc., which will all be discussed in this research paper.