Problems with the Current American Tax System
Most of us now can fathom how complicated the tax code has gotten. This is why many huge companies have to hire accountants to manage their taxes, making sure they don’t make mistakes in filing their taxes, lest they face troublesome litigations. A complex tax system isn’t going to help the country. If anything, it’s going to require people to pay higher taxes but ironically result in lower revenue for the government. It really doesn’t work in favor of either the government or its people.
The government ought to simplify the tax code. One way in which the country’s economy can ameliorate is through less complicated tax policies, which will put less burden on the citizens. Opposing forces are on the interplay here. However, the President has been urging the tax reform, insisting on lower taxes.
Everyone, businesses and ordinary employees alike, seems to be in favor of friendlier tax system and simpler tax payment methods. Washington officials are advocating meaningful tax reform, an overhaul that suggests taking down of the present tax system.
On the other hand, the Government Accountability Office recently issued a report that indicates huge corporations are paying less than half of the federal tax rates. These corporations are paying only an average of 13% in 2010, a far cry from the federal tax rate, which is 35%. The credits and deductions make the tax rate pointless.
Companies that outsource business process overseas are at an advantage here, because they pay lower taxes. Companies that can’t subcontract work overseas have to pay bigger taxes.
Categories: Federal Tax Tags:
Huge Companies Aren’t Really Paying Huge Taxes
It turns out big corporations are not paying as much as they ought to pay on taxes. Corporations are expected to pay as much as 35% on federal income tax, but congress investigation reveals that large companies pay less than half of that amount on the average.
The Government Accountability Office recounted that these companies paid 12.6% in 2010. Ironically, these companies are also seeking cuts on corporate tax. This report came out during the time when the government was keeping budgets tight and their increased awareness regarding clever tax cutting tactics of corporations.
According to Senator Carl Levin, American companies are frequently complaining about the 35% top tax rate, but they barely pay as much. In fact, they barely pay close to that amount. The Michigan Democrat knows the top tax rate is one of the highest in the world. In May, he issued a report that specifies the tax avoidance of Apple Inc. Note that he also looked into the low taxes of Microsoft.
The GAO report did not reveal companies that pay only a third of the top rate. However, there seems a trend of paying lower taxes. Earlier reports indicated companies paying between 20 and 30 percent in taxes. New IRS data and public financial statements exposed that profitable corporations are not really meeting top tax rates.
President Obama, together with some legislators, has advocated lower taxes for corporations.
A report published by GAO in April indicates a rise in annual cost of breaks on corporate taxes. It has risen more than twice since 1987, reaching 180 billion dollars.
Categories: Federal Tax, Income Tax, Tax Evasion Tags:
Tobacco Taxes Could Save Lives
The latest anti-smoking campaign measures include higher taxes on tobacco products. They have also placed bans on lighting up in public. Experts predict that these measures could possibly prevent millions of premature deaths around the globe.
Between 2007 to 2010, Turkey, Romania and thirty nine other countries established taxes and bans on smoking in public places that have already saved lives, a study published by the World Health Organization says.
Professor David Levy the lead author of the study from Georgetown University Medical Center located in Washington says that, “”If the progress attained by these … countries were extended globally, tens of millions of smoking-related deaths could be averted.”
Experts predict that a wider use of tobacco taxes and bans could potentially decrease health care costs and higher birth rates in babies resulting in healthier children.
Pakistan, Argentina and Italy have plans that they hope will reach an estimated 15 million people and convince them not to smoke. The study estimates that this plan could nearly 7.4 million smoking related deaths by 2050.
All recent studies seem to prove that the most effective steps in saving lives and reducing the numbers of smokers is higher taxes and bans. By banning smoking in businesses, restaurants and other public places could prevent 2.5 million smoking related deaths. Taxes could prevent 3.5 million deaths the study states.
Each year six million people die smoking related deaths. If the trend continues the experts say those numbers could reach eight million before 2030. The WHO is waging war on “Big Tobacco,” but to win this war it needs individual states to tax cigarettes heavily and ban smoking in public places.
Categories: Federal Tax, Income Tax, State Tax Tags: