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Taxes
An evaluation of two types of taxes: Sales vs. income
Sales taxes are invariably regressive taxes. Poorer people use a larger percentage of their taxes for consumption-related expenses, so they pay proportionately more of their income in sales taxes. For the wealthy, more of their spending is concentrated in savings and investments, since they can save a larger proportion of their income and still meet basic expenses. Of course, given that they often buy more items and more expensive items than the poor, the wealthy may pay more in total sum value than the poor in sales taxes. But as a proportion of their income, it is usually lower. Also, the poor spend a higher percentage of their income on necessities such as food which they cannot cut back on, even when the sales tax increases. Often, items like food and clothing are exempt from the sales tax to reflect this fact. But poor people may buy food items that are prepared, such a simple rotisserie chicken in the supermarket (which is taxed as a restaurant item for the service...
Sales taxes are primarily used to fund state operations. Sales taxes vary on a state-by-state basis and some states do not have sales taxes, while others do. Some states have both income and sales taxes; others only one or the other. The argument in favor of an income tax is that it is more progressive: people who have more income pay a higher rate of taxes. "A tax system is considered progressive if, on average, households with higher incomes pay taxes that are a larger share of that income. Thus, in a progressive tax system, the average effective tax rate-tax paid as a percentage of income-rises as income rises" (Distribution, 2012, Brookings Institute).
But some dispute whether income taxes are truly progressive, even when the rich pay a higher rate of taxes as a percentage of their income. First of all, the rich…
References
Are federal taxes progressive? (2012). Tax Policy Center: The Brookings Institution.
Retrieved: http://www.taxpolicycenter.org/briefing-book/background/distribution/progressive-taxes.cfm
Brown, Dorothy. (2012). Let's kill the progressive income tax. CNN. Retrieved:
http://www.cnn.com/2012/04/17/opinion/brown-progressive-tax-rates/index.html
Retrieved:http://www.taxpolicycenter.org/briefing-book/background/distribution/progressivity-measurement.cfm
Tax Equity and Fairness Taxes on property are also known as ad valorem tax imposed on the real value of the estate or other assets that an individual owns. The local government imposes these property taxes and charges are on a recurring basis (Mikesell, 2014). For example, a homeowner either pays their taxes on a yearly basis or gives a monthly fee as part of the mortgage payments. It is worth
Thus, the per capita tax revenue is presented in Table 5. Table 5: Ratio: Per Capital Tax Revenue ($Million) New York Activities 2010 2009 Tax Revenue $58,039 $55,804 Total Population 19,378,102 19,378,102 Ratio: Per Capital Tax Revenue $2,995: 1 $2,880: 1 Pennsylvania Tax Revenue $28,300 $27,600 Total Population 12,702,379 12,702,379 Ratio: Per Capital Tax Revenue $2,228:1 $2,173:1 The findings from table 5 reveal that both states record increase in per capital tax revenue at the end of the fiscal years 2009 to 2010. In the New York, the government realizes ratio of $2,880 per
Tax Liability A preview of capital structure issues In regards to the overall business environment, capital structure has profound implications of the business, irrespective of its industry. For one, a firm's capital structure is then the composition or 'structure' of its liabilities. For example, a firm that sells $40 billion in equity and $160 billion in debt is said to be 20% equity-financed and 80% debt-financed. The firm's ratio of debt to
The general fund collects over 86% of the total tax revenues and is the primary funding source for most commonwealth agencies. General fund tax revenues The largest significant source of tax revenues net of refunds is personal income tax. Reported personal income tax accounts for 38% of all tax revenues reported. Sales tax, which represents a tax on various items purchased by consumers, is the second largest category. Reported sales tax
Tax Liability Opening: This memo concerns the income tax questions for John and Jane Smith, a married couple. John is a lawyer and has questions regarding income to his firm, investment in office space, and overall preparation techniques. Jan has questions regarding business related activities, real estate investments, business expenses, and business investments. John Smith How is the $300,000 treated for purposes of Federal Tax income? Under 26 U.S.C. Section 1402, "The term "net
Tax Returns for C Corporation and Partnerships Tasty Treats and Beverages is a registered company in the United States. The company was incorporated in 2004, and operates under the C Corporation for the tax purpose. A C-corporation refers as a business entity subject to the federal income tax. A company operating under the C Corporation can enjoy host of tax credit that can assist it to enjoy a tax reduction that