...Approach to Reforming the Federal Tax System On February 3, 2013 marked the 100th birthday of the 16th Amendment. The 16th Amendment paved the way for the creation of the federal income tax that continues to this day to have far reaching repercussions on the American tax payer. Before the ratification of the 16th Amendment, the birth of the federal income tax dates back to the Civil War. In order to finance the Civil War, President Abraham Lincoln signed into law Revenue Act of 1861 on August 5, 1861. The Revenue Act consisted of a flat tax rate of 3% on income above $800 and 5% on individuals living outside of the United States. On July 1, 1861 United States Congress repealed the Revenue Act of 1861 and replaced it with the Revenue Act of 1862. The Revenue Act of 1862 introduced a progressive tax and established the Bureau of Internal Revenue. In 1872 Congress repealed the Revenue Act of 1862. One again elected officials tried to revive the federal income tax in 1894. However, in 1895 the federal income tax was declared unconstitutional by the U.S. Supreme Court because the tax was not apportioned according to the population of each state. In an address to Congress on June 16, 1909 President Howard Taft proposed that Congress consider a new amendment to the Constitution. “I recommend, then, first, the adoption of a joint resolution by two-thirds of both Houses, proposing to the States an amendment to the Constitution granting to the Federal Government the right to...
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...they can afford. Several people have a big issue with this because some regulations of the law give a large amount of control to the federal government. People argue that this involvement from the government makes the law unconstitutional. The biggest question being is if the pros outweigh the cons and if the plan will benefit the people of this nation There have always been issues in this country with healthcare being extremely expensive. This being the case, many people have been forced to go uninsured and put their own health at risk simply because they could not afford to make it a priority. Not only does this cause them to go without preventative care, but when the time comes in an emergency and medical attention is needed the average American cannot afford to pay the out of pocket medical bill and ends up filing bankruptcy on the medical bill resulting in the hospital losing a ridiculous amount of money. President Obama along with many Americans agreed that something has to be done to change this travesty. There are many pros and cons to the Affordable Care Act that needs to be evaluated in order to decide if this law is good or bad for our country. The following are some main points that we all need to think about: Pros: • Affordable benefits • Children’s CHIP program expands to 9 million participants • Small business tax credits • Children remain on parents insurance until the age of 26 • Improved Medicare plan •...
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...Flat Tax Rate Memo To: From: Date: Re: Benefits/burdens of implementing a “Flat Tax” From the U.S. Federal Government to each individual taxpayer in America, everyone cares about how tax is being paid. In this memo, we will discuss the benefits and the burdens of implementing a “flat tax”. The current U.S. tax system is complex. IRS has six federal income tax brackets ranging from 10 to 35 percent. This progressive tax system punishes the most productive members of society with a higher tax rate. Some scholars, such as Dan Mitchell, argue that, “From an economic perspective, the flat tax and the national sales tax (or fair tax) are virtually identical. Both would junk the current system. Both would restore fairness by taxing at one low rate. Both would eliminate all forms of double taxation.” A flat tax is a single rate that spans all income brackets of taxpayers, rather than the current “progressive” system, which taxes higher-income individuals at increased rates and includes numerous deductions and exemptions. From the article Ramifications of a Flat Tax—Shifting the Burden to the Middle Class, the author states that, because many taxpayers believe the current tax system is not good enough, it needs to be changed. Therefore, the article introduces two flat tax systems to replace the current tax system, one is the Forbes’ Plan and another one is the Hall and Rabushka Plan. The models of these two plans are as follow: 1. Forbes Simulation Model Tax Liability...
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...and citizens have expressed their distress in order to resolve or control the issue. Keynesian economic theory states that running a budget deficit is okay, as long as the deficit is not exorbitantly large and is not carried for a long period of time. Even though many experts agree with this notion, having a deficit at all is important to the present and future economic stability of a country. For the most part, the uncontrolled increases in spending and reckless tax cuts in the past have damaged the federal budget, which the White House and Congress have allowed to occur. President Bush has put a fair amount of influence towards the federal deficit in his campaigns, State of the Union Addresses, and policies as President. According to the article titled U.S. Budget Deficit Shrinks, at the end of the fiscal year for 2006, Bush stated that he had officially cut the budget deficit in half to $247.7 billion, as promised, from the projected deficit of $521 billion. The President credited his tax cuts and business tax incentives for the better-than-expected showing in revenues, which drove the deficit to the lowest level in four years. Obviously, there are many that argue against this rationale to the fact that there was more at hand than the President’s policies. The Democrats belittled the sharp reduction in the deficit for the last fiscal year, with some saying that the White House deliberately exaggerated its initial projection to show a better result close to the Nov. 7...
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... Each presidential candidate and their values regarding our country and how to achieve overall forward American growth differ in various ways. The most important aspects of the election include women’s health and rights, senior and overall healthcare, college loans and tuition for students, employment rates and the tax policy. Focusing on the two most popular candidates, Barack Obama and Mitt Romney, and the role tax policy plays in the election, we will further explore how electing one candidate versus the opposing one will effect the upcoming four years in relation to taxation. The presidential election will definitely have major implications on the tax code. According to the Grant Thornton organization, a globalized financial accounting and consulting firm, several circumstances will force lawmakers to make decisions that could dramatically reshape tax policy. This includes, the expiration of the 2001 and 2003 income tax cuts; the expiration of the estate and gift tax rules enacted in late 2010; spending “sequestration,” scheduled to take effect in 2013 as federal debt reaches the statutory debt limit; and alternative minimum tax relief and “tax extenders,” which expired in 2011. Each candidate’s plan for how to handle...
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...to middle income families and businesses. However, it has some obstacles for higher earners, and larger companies that do not insure their employees. One of the most noted pros to the ACA is their achievement in insuring millions of people with affordable, high-quality health insurance. Unfortunately, in order to get the money to cover these millions of newly insured people, taxes are increased, which directly affect us. You are now personally responsible to get health insurance coverage through the multiple companies that offer through the exchange. If you do not get coverage you have to pay a penalty fee. This adds more complications at tax time. However, with the new reform, many protections are in place to ensure that you can’t be dropped from coverage immediately whenever the insurance company decides you are getting sick too often. You also can’t be denied coverage or treatment for being sick or get charged more. I would say that is a big pro to the ACA. You can no longer be charged more for being a woman because you may need extra medical attention due to pregnancy or other yearly checkups. With that said, because insurance companies have to cover sick people, this increases the cost of everyone’s insurance. Another bonus to the ACA is the employer mandate which states that businesses with the equivalent of more than 50 full-time employees must provide health coverage. The downside to this however, is with the anticipation of the mandate, some businesses have cut employee...
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...the possible options that may become available to the people in the United States while focusing on the problems many will face once the law takes effect and they are unable to make such purchases with their current income only being forced to pay fines. Healthcare reform should provide assistance to those who are unable to purchase insurance on their own and further assist those who currently have insurance. The fear among the people it that it will only further cause low-income families to be faced with a larger problem of having to cover fines because of their lack of funding to make such purchases. Only time will tell which way this reform will lean towards with the inception date of 2014 when all will be required to carry medical insurance or be faced with unwelcomed penalties. Healthcare: A Problem Facing Many Individuals in the United States Healthcare, the cost and availability for the average individual living in the United States has become a major issue which many are now being faced with especially after the attacks on the United States on 9/11 which left many people without jobs which led to the lack of income and healthcare insurance. Today, many people need to make decisions on a daily basis as to whether or not their small incomes should be used towards medical help, prescriptions or on necessities. Low...
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...life soldiers sought after was complete with a wife, three children, a dog, and a cookie cutter home in suburbia. As many American civilians watched television programs that painted this pretty picture, and seeing veterans achieve this life style, it wasn’t long before the country began to chase the fantasy of owing a home and living the America Dream. Limited knowledge about buying a home was available to the consumer, as this was a fresh new concept. Since this concept of the American Dream was introduced, every generation seeks to achieve it year after year. In the process much information and statistics have been obtained; and the risks and rewards have since changed. There are huge risks involved in buying a home, and multiple pros and cons that should be thought out before buying. One should strongly consider the 10 principles of economics such as “A Trade-Off”, “The Cost of Something Is What You Give Up to Get It”, and “Rational People Think at the Margin” to name a few. A buyer should compare the marginal benefits, and the marginal costs; and be aware of the strength of the economy. As I consider these factors I also look at other markets that may affect my decision, and compare different outcomes. Personally I do not chase the “American Fantasy” as I like to call it; I buy homes for financial gain. It does not matter the reason for buying, every buyer should follow my pattern or something similar. My buying pattern differs from the average buyer seeking a new home...
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...Money, Banking and Monetary Policy Lashawn Lyles Principles of Economics Devry University Professor William Cheng April 14, 2013 The United States is the leading economy of the world however we have been in a recession since 2008. Last year, unemployment was at a record high. Today the labor market is gradually improving. Payroll employment has increased by 175,000 jobs per month on average, and the unemployment rate declined 0.3 percentage point to 7.9 percent over the same period. Cumulatively, private-sector payrolls have now grown by about 6.1 million jobs since their low point in early 2010, and the unemployment rate has fallen a bit more than 2 percentage points since its cyclical peak in late 2009. In spite of these gains, however, the job market remains generally weak, with the unemployment rate well above its longer-run normal level. About 4.7 million of the unemployed have been without a job for six months or more, and millions more would like full-time employment but are only able to find part-time jobs. High unemployment has substantial costs, including not only the hardship faced by the unemployed and their families, but also the harm done to the vitality and productive potential of our economy as a whole. The loss of output and earnings associated with high unemployment also reduces government revenues and increases spending, thereby leading to larger deficits and higher levels of debt. The problem started...
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...This is a debatable topic as it has always been for current presidents. However, this paper is directed towards his healthcare policy only. Obama’s health care bill has been a hot topic during his reign as President of the United States and has been met with much praise, as well as much contempt. While I deem myself a neutral party in presidential election and political action, I find myself at a crossroads still when dealing with the healthcare plan. It’s devised to aid Americans in the ever growing need for insurable care and sustained peace of mind that they may or may not be able to visit a physician, and not go bankrupt because of it. The following will educate readers of the new healthcare law enacted recently and provide both pros and cons for Americans, physicians, and insurers alike. The Affordable Healthcare Act was passed by congress and signed into law in March of 2010. The law plans to provide better health security by implementing health insurance reformation. This means insurance companies will be held more accountable in dealing with physician visits, healthcare costs will be lowered, and quality of healthcare will be obtainable by a larger spectrum of Americans (www.whitehouse.gov/healthreform). The main goal of the law is to provide insurance for every American. Those with employer supplied health insurance would keep their existing benefits. Further, any company with 50 or more employees must provide health coverage or pay a fine of $2,000 per employee...
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...Should drug testing be mandatory to receive welfare? Americans face tough challenges in life, and some may have to apply for financial aid for federal or state funding through rough times such has lost of job or current job not providing enough money pay the bills. Those who do receive assistance, should they be drug tested? There are several Americans who will agree with the drug testing because they feel their tax dollars are being wasted on those who do not qualify for assistance. The welfare program is there to help those in need. The ones that are suffering due to lack of employment or lay off should be receiving the assistance. There are several families out there struggling but the parents are causing their struggle because of drugs. Many people decide that drugs are more important than their families because they are so addicted to the drug. If drug users can afford to pay for their drugs, than why can’t they also afford their own food? A person should put their own life and safety and as well as their family before they purchase any drugs. If they decide to buy drugs, than they are not in much need for TANF, food stamps, or any other federal or state assistance. If they take a drug test and fail the test, the state should have their own laws and take action for the safety of the family. This could mean more children in foster or shelters due to the parents lack of judgment of what is important. One in six Americans are relying on government anti-poverty programs...
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...that is founded in trust and understanding. We forge alliances only because of the things we get from it. But globalization has formed some semblance of unity among all us and the concerns of other nation that back then were opted to be resolved on their own are now an issue with other countries as well and all unite to propel themselves to a solution. Globalization is often used for its financial connotations. The influence it has however is not contained solely to the economy. Other international aspects such as social relations, political discourse and psychological manifestations are also a part of globalization. We have constantly heard the globalization pros and cons and the debate of these globalization pros and cons continue up until now. Here is a bit of a crash course of the pros and the cons of globalization. Pros of globalization are that more accessible market for anyone all over the world regardless of color, race, and social class. “Steady supply of cash to developing countries and even the well established ones. There is an increase in the production capabilities of companies and because of this they now have more freedom to customize their services and products fitted to the needs of the consumers. Political merging will be frequent and a more peaceful and orderly world order will be set”(Weidenbaum, 2005). Information and communication will be strengthened not just between two countries but also from all countries around the...
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...Policy One of the most crucial issues of today is the issue of health insurance and availability of quality health services to all residents of the U.S. This paper will analyze the Obamacare Healthcare Policy-highlighting its core elements, health care problem solution, and the policies history. Also it will evaluate the pros and cons using different perspectives in debate. Let’s begin with the elements of Obamacare. The Patient Protection and Affordable Care Act (PPACA), also called Obamacare or the Affordable Care Act, is a United States federal statute signed into law by President Barack Obama on March 23, 2010 (ObamaCare Summary: A Summary of Obama's Health Care Reform, 2013). Since the establishment of Medicaid and Medicare of 1965, Obamacare is one of the most significant expansions from the government and administrative overhaul of the U.S healthcare system. The purpose of the Patient Protection and Affordable Care Act is to raise the rate of health coverage of Americans, to modernize the delivery of health care services, and to reduce the overall costs of health care. This is to be done by restricting certain insurance company practices and providing tax credits and subsidies for individuals and businesses. Prior to the approval of the Obamacare Policy, the American health care industry was in deep calamity. Around 50 million people had no health insurance. Many people with pre-existing conditions were being disallowed from getting health insurance because there...
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...that the past generations was fortunate enough to receive. Before more money was being saved then what was being spent for Medicare, and that extra money was put into the Hospital Insurance Trust Fund and the Supplemental Medical Insurance Trust Fund. Those funds total about $500 billion, all of it US Treasury bonds. However now thanks to the increasing number of individuals on Medicare, it's expected that this program will not be able to live up to its obligations much longer; even with the current general budget contributions there are speculations that the funds may run out by 2020. With only enough funds to last several more years, it may be time to take extra measures to preserve the Medicare program. Currently the Medicare payroll tax is 2.9% on all wages,...
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...amount of pay I receive. Before I even receive my paycheck money has already been deducted for such taxes as FICA, state, federal and local. Week after week I see more of my earnings taken away. I would like to see a tax system in place that has less loopholes, is easier to understand and is fairer to all working Americans. Our current progressive tax system effectively redistributes income. This means those who earn more pay higher taxes while those who earn less pay less tax. In a way this does seem fair because it closes some of the wealth gaps. The taxes collected by the government are used to fund social programs such as social security, social welfare and public assistance. This is beneficial to struggling families because it allows them to have more money to pay bills and buy necessary products. This system also benefits the wealthy because they have the potential to make more money when the economy is good. Another benefit of the progressive tax system is the continuous flow of money into the economy. A wealthy person will continue to spend money regardless of the amount of money he/she pays in taxes. According to Calvin Wolf “it is better to tax the wealthy more because they can afford to continue stimulating the economy even with a heavy tax burden; this helps the economy function more effectively. Poor people, who cannot handle a heavy tax burden, should be freed up to spend as much of their money in the consumer economy as possible. (Wolf C. , 2013) On the...
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