The Unfairness of US Tax Regimes

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 noting that these taxes are subject to fluctuation basing on the jurisdiction assessment of the property's worth by looking at factors like its market value, condition, location and the changes to the apportioned amount to the various tax recipients. For instance, when residents of a given community vote to have the millage rate increased for their school system, this affects the tax rate on homeowners. Therefore, the tax levied is increased on their properties, and the reverse applies; when the property value falls due to things like adverse economic circumstances, this decreases the home taxes. Boats, automobiles, airplanes, boats and recreational vehicles are other items subject to property tax. In some states, other taxes imposed on other business types are such as wharves and factories among others.

A tax on purchased goods and services is commonly referred to as sales taxes and is where the local governments and states raise their revenues. At the retail level, purchases made have a varying tax rate assessed on the sales price percentage of a given item. It is between jurisdictions that these rates vary and the item bought like a pair of shoes is taxed at one rate while restaurant food at another and staple commodities bought a grocery store may not have tax impositions. The most equitable taxation forms are the sales taxes because they are made voluntarily and more money is extracted from consumers. In contrast, there are those who see it as a regressive form because poorer people pay larger portions of their incomes in sales taxes than the wealthy people of the community. When talking about excise taxes, we base it to the number of items, for instance, the centralized government imposes an excise duty on every gallon of gas purchased. This is regardless of the price being charged by the seller. Moreover, items like alcohol and cigarettes have taxes called sin taxes imposed on them. Whereas, those fees referred to as user fees are imposed on a variety of services such as toll roads, hotel rooms, airline tickets, utilities, and rental cars among others (Mikesell, 2014).

In most cases, the tax systems are fair and equitable, and maxims attributed to this include economic efficiency, simplicity, neutrality, and transparency. According to fiscal policy advocates, equitable tax systems are perceived to have both horizontal and vertical equity. Horizontal implies that the taxpayers with similar situations pay the same tax amounts. However, vertical equity suggests that those individuals with high income or property pay more taxes since they have better pays. In my opinion, taxes imposed are fair and equitable because we are mostly paying for the infrastructure and services being provided by the state, federal, and local government. In relation to this, the political process has ensured that it has provided its citizens with input on how and the extent they are taxed. Moreover, the public officials serve as good stewards of generated resources by the tax system.