Free Essay

Income Tax

In: Business and Management

Submitted By tclar90
Words 337
Pages 2
I am overly surprised with the information presented in this article. With roughly over 300 million citizens in the U.S, in 2009 only 53% of these people payed federal income tax, while the other 47% are paying next to nothing and in many cases profiting from the government. I strongly believe in the “American Dream”, the ideology that America is a place where any thing is possible and a man or women can earn a modest living with hardwork and dedication, it seems as though this ideology is being skewed. I’m not againist the wealthy paying their fair share of taxes, but it seems like they may be carrying the entire load. I believe that if we create programs to benefit everyone, everyone should pay into them not just the top 10%. The article points out that the financial recession of 2008 contirbuted a lot to this overall affect, and that years prior to 2009,the Bush Administartion inacted several tax laws that saved the top 10% of taxpayers million of dollars and negatively affected the middle class. The artcile also sates that federal income taxes are the #1 source of income for the government, netting an estimated $900 billion annually. With the top 10% of Americans contributing the most, I believe that this system needs to be restructured. I somewhat agree with the flat tax rate, where everyone just pays a percentage of their income without recoginizing deductions, but being as though I am a college student, those deductions greatly affect my overall federal tax return. I belive that there is a better system where everyone would benefit and pay their respective portion, we as taxpayers just need to work towards it. Also, I believe that this article doesn’t point out that most of the taxes that the middle and lower class Americnas pay are in the form of regressive taxes, such as sales tax, social security, and medicare. Also many working middle class Americans pay a substantial higher effective rate than the wealthy.

Similar Documents

Premium Essay

Income Tax

...Income based property tax relief: Circuit breaker tax expenditures. Jeffline joseph Unit 8 project part 4: First draft final paper composition 2 graded assignment This paper explores four publish articles that report on result from research conducted on mechanisms used by states to provide income based property tax relief, commonly called circuit-breakers. The articles, however, vary in their definitions uses of these mechanisms provide property tax relief to overburdened taxpayers. This paper examines issues in circuit breaker program administration are also considered. Numerous studies have been conducted on various facets of tax relationships focusing on the level of poverty in the economy, closeness, property tax relief provided to households based on income. To understand how both the government think of income tax and what the economy thinks about income tax and the relationship are affected are the more common names used. What the government thinks of the income tax the government support the economy on what the people think on how to make life easier and relax life. The government point of view is the fact they provide anti-poverty measure, including food stamps, the Earned Income Tax Credit and unemployment insurance, from the money used on the income tax. What the economy thinks on income most low income parent depend on their monthly work check to provide for their children’s and when the government...

Words: 923 - Pages: 4

Premium Essay

Income Tax

...[pic] | | |IAS 12 INCOME TAXES | |HISTORY OF IAS 12 | |April 1978 |Exposure Draft E13 Accounting for Taxes on Income | |July 1979 |IAS 12 Accounting for Taxes on Income | |January 1989 |Exposure Draft E33 Accounting for Taxes on Income | |1994 |IAS 12 (1979) was reformatted | |October 1994 |Modified and Re-exposed as Exposure Draft E49 Income Taxes | |October 1996 |IAS 12 Income Taxes | |1 January 1998 |Effective date of IAS 12 (1996) | |October 2000 |Limited Revisions to IAS 12 | |1 January 2001 |Effective date of...

Words: 1692 - Pages: 7

Premium Essay

Income Tax

...of the Income Tax 1. A General Overview of the Income Tax 2. Coverage Scope of the Income Tax 3. Deductions Allowed for Taxation Purposes Part 1. A General Overview of the Income Tax In the RM the unitary income tax was introduced on 1.01.98 and replaced three taxes: the profit tax of enterprises, the individual income tax, and the profit tax of banks and other crediting institutions. In most countries of the world individual and corporate income tax vary; this is why the unification of these taxes is an innovation in the taxation practice. The income tax subjects comprise juridical and natural persons receiving income from any sources on the territory of the RM during the taxation year, and juridical persons-residents, which receive investment and financial income from sources outside the RM. Since there are various interpretations of the terms individual and company in the taxation and civil legislation, we will explain some of them. According to the taxation legislation juridical persons are: 1. Any enterprises, institutions, and organizations involved in enterpreneurial activity with the exception of individual enterprises and farms. 2. Non-residents with an economic presence on the RM territory According to the taxation legislation natural persons are the individual enterprises and farms. According to the taxation legislation, taxation subjects are the entities legally responsible for paying taxes. The income tax object is the net income, including...

Words: 3979 - Pages: 16

Premium Essay

Income Tax

...Chapter 9 Individual: OC/OI Other sources of income 3(a) in Div. B: * CPP pension benefit: can elect to do income splitting – 50% of the combined CPP benefit received. Contributor must be >60 years old * Pension income: 50 of combined pension income. >65: eligible pension income includes annuity payments under RPP.RRSP,DPSP. RRIF <65: RPP + death of spouse payment * Retiring allowance: pension income and death benefits. A. retirement from an office/employment in recognition of long service B. loss of office including court-awarded damages received by taxpayer * Annuity: full amount of annuity payments entitled from an investment of money – capital portion * Amount received from deferred income plans: 1. RESP: life-time contribution limit 50,000, over max. 31 years. Contribution not deductible/ is taxed, accumulated investment income is taxable to beneficiary (<21) as “Educational assistance payments:” a. CESG- Canada educations saving grant: 20% of $2500 of annual contributions to an RESP of children up to 18/ max. of $500 per year per child/ max. CESG per child is $7200/ additional CESG: net income of family <43561, 20% matching of first $500, if NI 43561-87123, 10% b. CLB- Canada learning bond: child bofrn after dec. 31 2004, first CLB of $500, $100 each year including year turning 15. Limit < $2000 per child, can be transferred to RESP before 18 c. Distribution: back to subscriber if hes alive and either beneficiary...

Words: 2385 - Pages: 10

Premium Essay

Income Tax

...Income Tax Law Income Tax Law and the National Budget 2010-2011 Md. Abdur Rashid, FCMA B.Com. (Hons.), M.Com., DAIBB, LLB, FCMA Income Tax Law explain changes in tax struc-ure of an economy over time under t the impact of economic development and of political and social factors. Tax structure is affected by economic development in three ways: (a) tax base undergoes a change as the develop- ental process m proceeds; (b) change in the tax base brings about changes in the revenue system: and (c) economic development leads to changes in the objectives of tax policy. Bangladesh Government collects taxes on account of custom duty, sales tax, value added taxes, excise duty, cess, fees, fines, penalties, income tax, advalorem duty, etc. It appears that to fulfill the objectives of tax policy the Government every year brings some changes in various tax laws to collect more taxes on the basis of above tax structure. be established for those items to repair or servicing and thus to reduce the unemployment problems in the country. National Budget Every year before preparing National Budget the National Board of Revenue holds series of meetings with various trade bodies, trade associations, groups of people, various academic and professional Institutions. It seems that this year the discussions have been held on various scopes and opportunities of collecting more taxes. The discussions, of course, have been held in various dimensional scopes. In such a meeting organized by Management...

Words: 1863 - Pages: 8

Premium Essay

Saving on Income Tax

...research about tax planning and ways to save tax for both individual taxpayers and business owners. There are many different types of tax planning that can be beneficial for all taxpayers. Besides that, by researching of ways to help individual taxpayers and business owners to save tax, I have learnt that there are many tax exemptions such as medical, dental, and childcare benefits. Moreover, the government has provided taxpayers with many tax reliefs such as personal relief, wife relief, child relief, medical expenses relief and so many more to help reduce the chargeable income of individual taxpayers. Furthermore, the government also provides tax rebates for individual taxpayers as well. By applying all the knowledge gain into tax planning, taxpayers will be well equipped in managing their taxes and will be able to make prompt payment and be able to fully utilize all the different ways for them to save on tax. Task 1 : Explain what tax planning is. 1.1: Meaning of Tax Planning Tax planning involves planning in order to avail all exemptions, deductions, and rebated provided in Act. The Income tax law itself provides for various methods for tax planning. Tax planning, whether personal or company, are interrelated and integrate part of the planning process. Generally it is provided under tax exemptions, tax deductions, personal rebates and personal reliefs. Tax planning is resorted to maximize the cash inflow and minimize the cash outflow. Since tax is kind of cost...

Words: 3817 - Pages: 16

Premium Essay

Income Tax

...Wilman Martinez Income Tax 1 Dr. Nazik Roufaiel Module 1 Assignment Part 1 March 21, 2014 35. Serena operates a lawn maintenance service in Southern California. As most of her employees are itinerant, they are paid on a day-to-day basis. Because of cash-flow problems, Serena requires her customers to pay cash for the service she provides. a. What are some of the tax problems Serena might have? Serena might have problem keeping track of sales taxes and/or paying FICA and FUTA taxes. b. Asses Serena’s chances of audit by the IRS? Serena will have a great chance of getting audit by IRS because she Receives payment in cash and those transactions are easier to hide. (Hoffman & Smith 2014, p. 1-21) 42. On a federal income tax return filed five years ago, Andy inadvertently omitted a large amount of gross income. a. Andy seeks your advice as to whether the IRS is barred from assessing Additional income tax in the event he is audited. What is your advice? It will depend on how much money was omitted. The IRS is barred as long as the amount omitted was less than 25% of gross income and the tax return is not view as fraudulent. The IRS can only go back three years to access additional tax liability. On the other hand, if it is more than 25% the statue of limitation is increased to 6 years, then the IRS is not barred. (Hoffman & Smith 2014, p. 1-23) I would recommend Andy to fix the mistake....

Words: 1008 - Pages: 5

Premium Essay

Income Tax

...12.) Which is more appropriate tax rate to use to compare taxpayers’ tax burdens-the average or the effective tax rate? Why? -Effective tax rate would be the most appropriate because it provides a better depiction of a taxpayer’s tax burden. The reason for this is because it depicts the taxpayer’s total tax paid as a ratio of the sum of both taxable and nontaxable income earned. 14.) Arnold and Lilly have recently had a heated discussion about whether a sales tax is a proportional tax or a regressive tax. Arnold argues that a sales tax is regressive. Lilly counters that the sales tax is a flat tax. Who is correct? -Arnold and Lilly are both correct. The reason Lilly is correct is because a sales tax by definition is a proportional tax. As taxable purchase increase the sales tax rate (marginal tax rate) remains constant. Arnold is correct because one’s total income spent on taxable purchases likely decreases as total income increases, so the sales tax may be considered a regressive tax. 16.) What is the tax base for the Social Security and Medicare taxes for an employee or employer? What is the tax base for Social Security and Medicare taxes for a Self-employed individual? Is the Self-employment tax in addition to or in lieu of federal income tax? -The tax base for the Social Security and Medicare taxes for an employee or employer is the employee wage. The tax base for Social Security and Medicare taxes for a Self-employed individual is the Net earnings from...

Words: 367 - Pages: 2

Premium Essay

Texas Income Tax

...In my opinion, personal income taxes in Texas should not become adopted; this is an immoral thing towards the state. Taxing a person from their personal income tax may leave them with less money to pay their bills with more responsibilities. The personal income tax is paid by people with the money they earn, and it sounds like a corrupted way of taking away their hard earned wages. After all the taxes we are charged it may feel as though we pay personal income tax, but it is not included in our income tax system. Many of employees have federal tax which are; Social Security, Medicare and Unemployment. They are deducted from their purchases and benefiting from Social Security and Medicare when they finally retire, and possibly get a refund if...

Words: 600 - Pages: 3

Premium Essay

Income Tax

...Accounting for Income Taxes I. Overview – Accounting for income taxes involves both intraperiod and interperiod tax allocation. Intraperiod allocation matches a portion of the provision for income tax to the applicable components of net income and retained earnings. Income for federal tax purposes and financial accounting income frequently differ. Income for federal tax purposes is computed in accordance with the prevailing tax laws, whereas financial accounting income is determined in accordance with GAAP. Therefore, a company’s income tax expense and income taxes payable may differ. The incongruity is caused by temporary differences in taxable and/or deductible amounts and requires interperiod tax allocation. II. Intraperiod Tax Allocation – Intraperiod Tax Allocation involves apportioning the total tax provision for financial accounting purposes in a period between the income or loss from: a. Income from continuing operations b. Discontinued operations c. Extraordinary items d. Cumulative effect of an accounting change e. Other comprehensive income i. Pension Adjustment ii. Unrealized gain/loss on available for sale security iii. Foreign translation adjustment f. Components of stockholders’ equity iv. Retained earnings for prior period adjustments and v. Items of accumulated (other) comprehensive income g. General Rule – Any amount not allocated to continuing operations...

Words: 2526 - Pages: 11

Premium Essay

Corporate Income Tax

...Exercise 1 Enterprise A in the current tax year has the following activities (unit: million dong): a. Revenue from sales of goods: 20,000, including the value of returned goods of 2,000. b. Expenses declared by the enterprise for tax purpose are 16,000 (with legitimate invoices and documents). Including: * Depreciation expense of a 7-seat car (with the primary price of 2.4 billion VND, used by the Director. The car is depreciated using straight-line method within the period of 8 years): 300. * Expense for building medical facilities for employees: 100. * Salary and wages (according to labor contracts): 2,000; in which 400 is the remuneration of members of Board of Directors (not directly involved in directing production and business). * Efficiency bonuses for employees: 50 * Personal income tax payable: 150; VAT payable according to credit-invoice method: 250. * Other expenses are deductible. c. Other incomes: * Income from domestic contribution of equity capital to company B; enterprise A receives its share of income before company B pays CIT: 200. * Income from selling a machine with the price of 300, the remaining value of the machine is 20, the transfer expense is 2. Calculate the CIT payable for the tax year. Given: * The enterprise has sold the returned goods with the selling price of 1,500; the amount received is not accounted in revenue. * The enterprise pays VAT using the credit-invoice method. * The efficiency bonuses are not...

Words: 1325 - Pages: 6

Premium Essay

Federal Income Tax

...Federal Income Tax I Self Employed Income Bella Bonita is self-employed as a hair stylist. She works at Fancy’s Inc., where she rents a station. On Saturdays, she works at Fancy’s in the morning and then drives to the senior center to do hair for the residents. Bella is a cash-basis taxpayer who materially participates in the operation of her business. Bella did not make any payments that would require her to file Form 1099. She received Form 1099-MISC for $7,800 from Fancy’s, and had an additional $3,000 cash income in tips and payments from the senior center. She has a written mileage log showing 4,024 miles for 2014: – 3,514 miles from home to work and return each day – 510 miles from Fancy’s to the senior center The total mileage on her car for 2014 was 11,000 miles. She placed her car in service on May 6, 2010. She always takes the standard mileage rate. This is Bella’s only car and it was available for personal use. Bella has records for other expenses relating to her business: – Hair stylist’s station rental: $2,400 – Supplies: $1,000 – Car repairs: $475 – Business liability insurance: $450 – Tolls and parking paid on the way to the senior center: $60 – Business license: $50 – Meals with owner of Fancy’s to negotiate a business: $204 – Daily meals for self: $875 For line 13 on Schedule C use $450. The following information will be used for the next assignment. Bella also has been depreciating her hair equipment which she purchased on...

Words: 339 - Pages: 2

Premium Essay

Income Tax India

...Fiscal Policy and Social Security Policy During the 1990s Douglas W. Elmendorf Federal Reserve Board Jeffrey B. Liebman Harvard University and NBER David W. Wilcox Federal Reserve Board Revised July 2001 This paper was presented at a conference on “American Economic Policy in the 1990s” held June 27 to 30, 2001 at the John F. Kennedy School of Government, Harvard University. The views expressed in this paper are those of the authors and are not necessarily shared by any of the institutions with which they are affiliated. We thank Al Davis, Peter Diamond, Edward Gramlich, Peter Orszag, Gene Sperling, and Lawrence Summers for comments on an earlier draft. Elmendorf was formerly Deputy Assistant Secretary of the Treasury in the Office of Economic Policy, and prior to that Senior Economist at the Council of Economic Advisers; Liebman was formerly Special Assistant to the President for Economic Policy at the National Economic Council; and Wilcox was formerly Assistant Secretary of the Treasury for Economic Policy. Table of Contents Page 1. Introduction 2. Budget Outcomes and Projections Improved Budget Picture Sources of Improvement 3. Budget Deficit Reduction: 1990 through 1997 OBRA90 OBRA93 What Did Deficit Reduction Ultimately Accomplish? The Republican-Controlled Congress BBA97 4. Entitlement Reform and Saving Social Security First Entitlement Commissions Social Security Saving Social Security First 5. Social Security Reform Options Using Projected Budget Surpluses as Part...

Words: 25267 - Pages: 102

Premium Essay

Progressive Income Tax

...To address the economic issues the US faces today like the increasing national debt, wealth inequality, and stifled economic growth, I believe that increasing tax rates on wealthier individuals may be the best course of action. Currently, wealth in the US is distributed among individuals very disproportionately, with one percent of the population owning around thirty to forty percent of the total wealth. The national debt is currently valued at around 20 trillion dollars and continues to grow at an increasing rate. We currently have a progressive income tax system in place where wealthier individuals are taxed more heavily. I agree with this, but the highest tax rate is 39.6% for any individual making over around $500,000 annually. This means...

Words: 294 - Pages: 2

Premium Essay

Federal Income Tax - Business

...Tax deductions are related to the legislative grace and the ability-to-pay concept. 2 Restrictions: 1. Only deductions allowed by the tax law may be subtracted to compute taxable income. Congress allows deductions for the costs of earning income and certain expenditures. 2. A deduction is allowed for an item only if all requirements are satisfied. Business Expense: the expense must have a business purpose that is unrelated to its tax effect. Gross Income: Only the excess of an individual’s capital investement. The deduction for an item may not exceed the cost. Basis: The cost of an asset or an expense. Represents the max amt of an expenditure that can be deducted as a recovery of capital. Trade or business expenses are deducted FOR adjusted gross income (always) Production-of-income expenses are deducted FROM adjusted gross income-Does not apply to Corportations (deduction is reduced by 2% agi. If agi is 40,000 (6%=$800) and exp is $6000, amt of deduction is $5200) Conduit Entity: Investment expenses of individuals & miscellaneous itemized deductions must be reduced by 2% of agi. Most common deductions that must be reported separately -Charitable contributions - Investment interest expense -Investment expense -Section 179 expense -Nondeductible expenses TRADE OR BUSINESS EXPENSES • Sec 162, “ all the ordinary and necessary expenses…including salaries & compensation, traveling expenses (including meals & lodging), and rentals or other payments required)...

Words: 1410 - Pages: 6