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.