Income Tax Essays (Examples)

Taxes Why Does Income Tax Penalize Savers

Taxes

Why does income tax penalize savers but consumption tax would not?

Consumption tax differs from income tax in that it allows taxpayers to deduct any savings they may have from their overall income prior to calculating their taxes (p.644). This type of taxation has become increasingly advocated due to widespread low savings among people in the United States and long-term negative effects this may have on the economy (p.644). With a consumption tax, both savers and non-savers are taxed based on the figures associated with their labor income alone (p.649). However, with the consumption tax, those who have saved money are not required to pay any sort of tax on income earned from accrued interest in their accounts, which is different from requirements with regard to income tax (p.649). This illustrates how savers are penalized with income tax because they are taxed on interest accrued. Overall, the consumption tax…… [Read More]

Income Tax and Accounting for

However, a related New York Times article on the story reported: "In court papers, the I.R.S. said that First Data had actively marketed and sold offshore services to American merchants, typically investment and Internet-commerce advisory shops, who in turn used the service to help their clients hide taxable income…In 2002, the unit [Cardservice International and now called First Data Independent Sales] which works with 3,200 independent sales offices and agents to sell and provide financial processing services, began marketing offshore processing services with First Atlantic Commerce, an e-commerce company in Bermuda, according to court documents" (Browning 2009). The IRS states that First Data, "clearly markets offshore merchant account services to U.S. merchants as a means of tax avoidance by advertising its services on the Web sites of foreign promoters of abusive offshore tax schemes and products" (Browning 2009).

The pressure placed upon First Data is emblematic of the greater scrutiny…… [Read More]

Tax Loophole Income Tax Foreign

S. domestic law, a U.S. citizen or resident (Non U.S. person) who is a beneficiary of a foreign retirement plan would be subjected to the existing U.S. income taxation on all of the income that is accrued in their foreign investment plans even though their income is never currently distributed per se to the beneficiary. This should be the case unless the foreign retirement plan accounts as the employee's trust as described in section 402(b) of the U.S. Internal Revenue Code and the said individual is not one of the highly compensated workers who is subjected to the meaning of the section 402(b)(4)(a) Internal Revenue Code.

Therefore, as long as a given foreign retirement plan accounts as an employee's trusts with the person not being one of the highly compensated workers, then there is never an inclusion that is required by law. On the contrary, if the given foreign retirement…… [Read More]

Income Tax Pennsylvania Income Tax

The state of Pennsylvania also levies additional taxes on its citizens.

Taxes are levied not only for individuals, but also for businesses. Taxes are levied differently for incorporated and non-incorporated businesses. Incorproated businesses are considered an independent entity and is therefor taxed independent of its owners. This is commonly referred to as double taxation meaning the owner of the corporation must pay taxes twice, once on the salary derived from the business and once on the busisiness's total income. Non-incorporated businesses are viewed as being an extension of the individual tax payer, so the payer must only file one form and pay one total amount (571).

State taxes are linked to Federal Income Taxes in that Federal Taxes deduct the amount owed in state taxes from the tax payer's gross income. This is meant to ensure that tax payers are not taxed twice for money that was already paid to…… [Read More]

Florida Income Tax Controversy One

Later, however Democratic leaders approved a bipartisan plan, minus the homestead tax increase. ("State income tax unthinkable," 2007)

Income Tax Proponents, Opponents and Components Income tax proponents argue that even with Florida's exemptions for food and medicine, poorer people pay a higher percentage of their income in the form of sales tax than wealthier citizens. They argue that an income tax would prove to be fairer as sales tax is regressive. These individuals to support Florida adopting an income tax insist that this method of taxation, unlike the sales tax, could be adjusted to shift the burden to individuals who can afford to pay more than those who are poorer. ("State income tax unthinkable," 2007) Iris Lav, the center's deputy director, nevertheless insists that the probability of anyone persuading Floridians that they need to adopt an income tax, equates to: "a little bit of 'If fishes could fly'."

Dominic Calabro,…… [Read More]

Uk's 50p Additional Rate of Income Tax

UK Government Restore the 50% Additional Rate of Income Tax?

The United Kingdom has developed to become one the highest taxed nations across the globe despite impaired competitiveness and stifled economic growth. Unlike most OECD countries that have lessened their tax burdens since 1997, UK taxation has increased, which has resulted in reduced competitiveness of the country's position as a low tax regime. The other characteristics of UK taxation include forcing taxpayers into higher rate tax bands, which enforces higher tax rates for more people. However, in the past few years, there have been debates and controversies on whether the United Kingdom government should restore the 50% additional rate of income tax. This debate or controversy has been characterized with arguments and counter-arguments in favor and against such a move respectively.

Recent History of the Additional Rate of Income Tax

As previously mentioned, the United Kingdom is ranked among the…… [Read More]

Earned Income Tax Credit EITC

Finally, a 1998 Center on Budget and Policy Priorities report, examined research, data and findings on the EITC found that when this research was summarized to its substantiate bits, several positive themes over the benefits of the EITC emerged. They include (Greenstein & Shapiro, 1998):

Substantial positive effects on inducing single parents to work. A study by Northwestern University economists Bruce Meyer and Dan Rosenbaum. Meyer and Rosenbaum found that more than half of the substantial increase in employment rates among single mothers over the 1984 to 1996 period was due to EITC expansions; a larger effect on single mother employment than all other factors combined (Greenstein & Shapiro, 1998).

EITC offsets between one-fourth and one-third of the decline during the past 20 years in the share of national income received by the poorest fifth of households with children (Greenstein & Shapiro, 1998).

Among working families, particularly in the south…… [Read More]

Individual Income Taxes How Charitable

This generous act not only saves the taxpayer some extra cash come April, but it also helps a number of charities across the country. Charities can either use donated vehicles for their own use or they can auction them off in order to use the cash to help those in need. Either way, the charity is getting great use out of the old bucket which was just a nuisance to someone else.

Rules regarding donations have changed drastically over the years. In previous years, all one would need to do in order to donate a vehicle was to claim the market worth of the vehicle to the charity receiving the donation. They would then give you the paperwork necessary in order to claim the donation in one's tax returns for that year. However, in more recent years, this system has changed thanks to people who had been abusing the chartable…… [Read More]

Alternatives to the Current Federal Income Tax

consumption tax alternatives: retail sales tax, flat tax and personal consumption tax. Justifications for tax reform range from the need to simplify the current system to raising revenues to modifying social policy. In the face of growing demands by politicians and taxpayers alike, the topic of tax reform has produced alternate federal income tax proposals. This essay compares income tax to consumption tax, and also reviews the retail sales tax, flat tax and personal consumption tax systems. The comparisons include discussion of differences between proposals, relative degree of effectiveness, as well as ease of implementation. Each of the major categories proposed accomplish tax reform with varying degrees of success, which must be considered along with their associated trade-offs. This essay examines some specifics of those approaches.

Reasons for Tax Reform

Growing support for tax reform comes from both politicians and taxpayers alike. Surveys conducted during the 2009 tax filing season…… [Read More]

Should the UK Government Restore the 50 Additional Rate of Income Tax

UK Government Restore the 50% Additional Rate of Income Tax

The Recent History of the Additional Rate of Income Tax

It is important to note, from the onset, that income tax remains the government's largest revenue source -- effectively raking in an average of 30% of the total tax collected. In essence, every individual has what is referred to as personal allowance on income tax, whereby every tax year, all incomes that do not exceed the set allowance are not taxed. All other income is subject to the various tax rates captured in several bands. In the year 2009 budget, it was announced that beginning April 2010, individuals raking in incomes exceeding £150,000 would be subject to a new 50% tax rate (HM Revenue & Customs, 2014). The previous rate, prior to the introduction of the top rate by the Labor government had been 45p. However, the incoming government reduced…… [Read More]

Earned Income Tax Credit Earned

As mentioned above, several organizations are making efforts for advertising this measure. Even so, the IRS expects that a higher number of first-time applicants intend to use the EITC benefits. The factors that led to this situation are represented by the high turnover rates determined by the crisis.

In addition to this, several studies in the field have observed the fact that the level of EITC influences wages and the proportion of the workforce. In other words, EITC has been observed to lead to reduced wages. This result of the EITC affects eligible and non-eligible workers, which are disadvantages by the EITC introduction. EITC also leads to increased workforce, which determines improved sustainment of the economic situation.… [Read More]

Zero Income Tax Rate

countries that do not have an income tax. The first are small tax-shelter countries that seek to attract high net worth individuals. Their economies of tiny, and based on the value of transactions that such individuals bring to the country. Monaco, for example, requires substantial amounts of money to be deposited into its banks, which allow those banks to lend the money out (Maverick, 2016). Such countries succeed because they are tiny, and have minimal local populations and infrastructure needs. Another type of tax-free country is the failed state. A place like Somalia lacks the infrastructure for collecting taxes, and therefore lacks them. But such countries also provide zero services for their people, and are entirely unattractive places in which to live, despite on paper being the libertarian paradise of zero government intervention in daily life. The third category are countries that generate sufficient revenues in other ways that income…… [Read More]

Is the Corporate Income Tax a Good Idea

Dropping or Lowering Corporate Taxes

This is a paper with two charts concerning corporate taxes. Corporations are taxed under a tax rate structure depending on the income. There has been talk about dropping the corporate tax. This paper will discuss the pros and cons of this. What methods can be used to drop or lower corporate taxes and why?

HOW CORPORATE TAXES HELP OUR ECONOMY

Where did the corporate income tax begin? How does it affect our economy? What is the future of the corporate income tax? Will deleting corporate income tax be the answer for the economy? What about cutting part of this tax? How does the corporate income tax help the economy? These are questions that will be answered in this paper as well as how the corporate tax is affecting our economy now.

The Beginning of Corporate Income Tax

How the corporate tax began is an example…… [Read More]

Tax Liability Opening This Memo Concerns the

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 earnings from self-employment" means the gross income derived by an individual from any trade or business carried on by such individual, less the deductions allowed by this subtitle which are attributable to such trade or business, plus his distributive share (whether or not distributed) of income or loss described in section 702 (a)(8) from any trade or business carried on by a partnership of which he is a member"

All income earned during a business year…… [Read More]

Tax Equity

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…… [Read More]

Tax Fraud Taxes Tax Laws

Where individual taxpayers are concerned, the abstruseness and complexity of filing one's taxes can have the impact of obfuscating the legal imperatives driving one's filing obligations. This means that an individual may report his or her taxes inaccurately but without the intention to commit fraud. According to Daily, "Although auditors are trained to look for fraud, they do not routinely suspect it. They know the tax law is complex and expect to find a few errors in every tax return. They will give you the benefit of the doubt most of the time and not go after you for tax fraud if you make an honest mistake. A careless mistake on your tax return might tack on a 20% penalty to your tax bill. While not good, this sure beats the cost of tax fraud -- a 75% civil penalty. The line between negligence and fraud is not always clear,…… [Read More]

Tax Revenue Analysis Project Tax

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 person in 2009. However, the par capital tax revenue increased to $2,995 per person in 2010. Thus, the per capita tax revenue is increasing in the New York. Similarly, Pennsylvania recorded ratio of $2,173 per person in 2009 however, the ratio per capital tax revenue increased to $2,228 at the end of the fiscal year 2010.…… [Read More]

Tax Law and Accounting

Tax Law

Taw Law and Accounting

In the United States, 43 states currently impose a personal income tax. New Hampshire and Tennessee tax only "intangible" income, which is composed of interest and dividends. The remaining 41 states have "broad-based" income taxes, with most sources of income subject to tax. In 1932, Washington voters approved an initiative establishing a personal income tax. However, the State Supreme Court ruled this initiative unconstitutional. Since then, the voters have defeated six constitutional amendments trying to enact a personal income tax. The last proposal in 1973 was defeated 77% to 23%. Subsequent efforts at enacting a personal income tax have died in the Legislature.

State income taxes are generally tied in varying degrees to the federal IRS personal income tax statutes. This creates a number of administrative efficiencies for the states. It also makes it simpler for the taxpayer to comply. While most income is…… [Read More]

Tax Advise Table of Contents Optional Louise

Tax Advise

Table of Contents (optional)

Louise is aged 50 and single. Since 1994 she has carried on a retail business as a sole trader. Her trading profits as adjusted for tax purposes and after capital allowances, for the year ended 30th April 2009 were $150,000.

The business is carried out from a number of valuable retail outlets, all of which are owned by Louise personally. These units have been acquired over a number of years since 1994 and their market values have increased considerably in recent years.

Apart from her single personal allowance tax credit, Louise is entitled to income tax relief in respect of $10,000, which she pays annually to a Revenue approved pension scheme.

Louise's personal living expenses and other financial commitments total $50,000 per annum (including the contribution of $10,000 to the Revenue approved pension scheme referred to above).

Louise is considering transferring her business to…… [Read More]

Tax Efficient Financial Strategies Company Name Here

Tax Efficient Financial Strategies

Company Name Here

Managing Director

MACROBUTTON AcceptAllChangesShown [name]

Tax Efficient Financial Planning

Astute financial planning in the current economic climate is critical. While we cannot control the ebbs and flows of either the market or the decisions of the government that affect one's personal finances, we can attempt to grow and preserve wealth through tax efficient financial planning. There are solid vehicles available, if utilized correctly, can successfully minimize income, capital gains and estate taxes for our clients. Below provides detailed information on vehicles available to provide minimal tax exposure.

Income Tax Minimization

Deferred Variable Annuities

Using this method clients not only are able to minimize their incomes taxes, but they this vehicle also provides asset protection.

401K or other Qualified Retirement Plan

Contributions to a 401k or a similar retirement plan are tax-deferred and not-taxable until withdrawal. Contributions help to lower an individual's AGI thereby…… [Read More]

Tax Law the Nature of

With regard to the salaried people the federal tax system has improvised a method to flush the surplus spending funds in advance by the mandatory provision of requiring employers to withhold tax from payments in advance which on remitting will be computed as part of the total tax liability of the employee. This method of advance collection is an important feature said to be the pillar of the tax system. The collected amounts are either adjusted to the next year tax if surplus, or credited if equal. This collection method raises revenue to the tune of seventy billion Dollars annually.

The taxation of company income is the subject of a debate. While individual income is taxed, the taxing of corporate income by legal fiction of considering it an entity has caused ire to noted economists and business persons. Heavy burden is shouldered by the stock holder, who also pays the…… [Read More]

Tax Systems Are an Important and Integral

Tax systems are an important and integral part of any economy around the world. Taxes are imposed by the governments on various activities and it eventually becomes an important source of revenue generation for the governments. Governments use tax revenues in order to finance their public expenditures. Besides that taxation systems are also a very important tool for the governments in order to influence the aggregate demand and consumer expenditures in the economy. This means that the governments influence the way people spend their money. This in turn influences the rate of inflation and employment in the economy.

On a broader perspective there are two types of taxation systems namely direct taxes and in direct taxes. Direct taxes are taxed charged on one's income and they cannot be avoided as they are charged at source. Examples of such taxation system include income tax and corporation taxes. In contrast, indirect taxation…… [Read More]

Tax Law Letter Mr And Mrs Bob

Tax Law Letter

Mr. And Mrs. Bob and Anna Diamond

I would like to start by thanking you for entrusting me with guiding you as you plan this next phase of your financial growth. Tax considerations are an important part of ensuring your financial independence and security at any time, and after retirement they can become some of the most significant factors and forces of change in a family's financial position. It is wonderful that you are pursuing your various options in such a considered and careful manner, and I am more than happy to help you in this process of growth and change in your lives.

It is my understanding that you are considering several different property purchases and other methods for generating income through the renting of properties you do or will own. Specifically, you are exploring the possibilities of letting out rooms in the house that you…… [Read More]

Tax Case Study

Tax Case Study

Requirement

Tax code section 721 "provides that no gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership." Both parties agreed to contribute personal assets to the partnership, and they, nor the LLC, suffers any tax consequences as a result of the conversion of the property to the partnership. Because both contributed equal property to the LLC when it was formed (or so they thought) they both have a 50% ownership of the partnership.

The initial basis of both is not actually 50%. Tax code section 722 "provides that the basis of an interest in a partnership acquired by a contribution of property, including money, to the partnership shall be the amount of the money and the adjusted basis of the property to…… [Read More]

Tax Cut Policy on Public

(the Bush Tax Cut: One Year Later)

The members of the AFSCME believe that the Taxes imposed under the Bush administration has influenced them very unenthusiastically, since it has assisted to restrict their capability to concentrate on vital national problems for fairly a few years, due to the reality that the Tax Act comprises every clause that would help the affluent and well-to-do and might add more new tax cuts slowly, and the entire would render the ultimate bill more costly than even George Bush had planned for it to be. Ultimately, every household holding job would be harshly hit by the plan. Besides, its influence on the question of Public Debt is worrying as well. The reality that novel Tax Cut might rescind the Estate Tax is an issue of apprehension as well, particularly since a majority of the states normally share this proceeds with the federal government. (the…… [Read More]

Tax Returns for Partnerships and C Corporation

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 the company has to pay to the federal government. This paper uses the excerpt from the Tasty Treats & Beverages, Inc. annual income statement to prepare the tax return for the company.(See Appendix 1).

Tasty Treats & Beverages, Inc.

Income Statement ($)

For year ended December 31, 2013

Revenue from sales

1,500,000

Total Expenses

(885,050)

Income before taxes

284,450

Federal income tax expense

96,713

Net income after taxes

187,737

As being revealed in the company statement of income data,…… [Read More]

Taxes Direct Democracy and Federalism

This is designed to help support individuals who are dealing with financial challenges. The problem is that select amounts of recipients will use as a way to live off of the government. (Wolf, 2005)

How might a socialist and a capitalist government differ in its treatment of the problem of unemployment?

Socialists want to see massive amounts of government spending to create new jobs, training programs and provide unemployment benefits. A capitalist is opposed to these kinds of programs and believes that charities / private enterprises can address these issues.

In your opinion, should the government have the responsibility of providing health care for every citizen? Why or why not?

Yes, the government should provide health care. The reason why is because prices are increasing exponentially and the number of uninsured is rising. These factors are a sign that there is very little competition inside the sector. To address these…… [Read More]

Tax Law Oil and Gas Is Currently

Tax Law

Oil and Gas is currently at the core of Russia's economy, even though there has been talk at the head of the Russian federation of intentions to attempt to move the economy from one which is based solely in these natural resources, to one which is based on rapidly evolving technology. Of course it will be at least a decade before movements and developments in this fashion are able to unfold with real significance. However, given the strong presence and foundation of the oil and gas sector in Russia's economy, it is natural that the bulk of the regulatory law is founded around these pillars.

Excise Tax

Excise taxes in Russia refer to taxes which need to be paid out on certain goods in Russia, such as raw and refined alcohol, alcoholic drinks which are stronger than 1.5% by volume, cars and motorcycles with engines that have horsepower…… [Read More]

Tax System of One Country With That

tax system of one country with that of another is an exercise fraught with dificulties and ultimately doomed to failure . tax system will never be much more than a reflection of strongly national cultures and forces. discuss this statement in the light of your knowledge of comparative tax system in developing and/or developed countries i

Tax Systems

The following pages focus on analyzing the factors of influence on different countries' taxation systems. The paper begins with an introductory section that allows readers understand the point-of-view used in this paper. The following section refers to describing the taxes pand taxation systems used by most countries and their objectives, in order to understand the similarities and differences between these taxation systems. The paper continues with the analysis of several factors that influence countries' tax system design, like cultural factors, technological developments, and natural resources. In order to exemplify this, the taxation…… [Read More]

Tax Regulations

Mrs. Hapless

When considering your case for qualification for Innocent Spouse Relief, the facts are blatantly clear. Under certain circumstances, a spouse can qualify for relief from the IRS. Unfortunately, as detailed below, you do not qualify for any of these relief efforts. Your actions appear to be in strict opposition of the relevant tax code and can be considered fraudulent. Below is a brief explanation of the relevant facts pertaining to your case, the specific issues of your case, and our conclusion.

To begin, married couples who file joint returns are jointly liable for their federal income tax liability. In addition, married couples who live in community property states are jointly liable for community income regardless of how they file their returns. Innocent spouse relief takes three forms under Sec. 6015. The three instances are outlined below. Unfortunately, Mrs. Hapless you do not qualify for relief under any of…… [Read More]

Tax Implications of Working Abroad

Foreign Work Reimbursement

When it comes to job situations that involved a lot of travel or otherwise involve being away from home, working a foreign assignment would surely have to be near or at the top when it comes to the complexity and considerations that are involved. There are some massive legal and lifestyle implications involved including paying for lodging/food while working abroad, the tax implications and so forth. The assignment for this paper asks the author to offer an opinion on the most "essential" reimbursement types when it comes to working abroad. While some may point to cost of living, rent or food, the real issue would be taxes due to the complexity and variance of the tax codes and treaties that exist between the United States and other modernized countries of the world.

Analysis

Many employers operate and exist in multiple countries and this sometimes necessitates having domestic…… [Read More]

How to Limit Your Taxes

Income Tax Deduction

Taxes have existed in the United States for all of its existence but they took on many forms prior to the modern income tax. The income tax was not finalized and permanently ensconced in the United States law until the 1910's. The tax rates, at its normal levels, have been adjusted upwards and downwards depending on the economic cycles with the most recently developments being the "Bush Tax Cuts" of the 2000's and the recent tax spikes under the Obama Administration. While income taxes affect some more than others, nearly all people are affected based on the assets/income they possess and earn as well as the familial structure they maintain.

Common Tax Deductions

As noted in the introduction, familial status and assets/income are far and away the biggest determinants on how much tax is paid, if any. Indeed, some people actually get money from the government and…… [Read More]

School Finance Property Tax Caps

Tax Caps/Schools

Tax revolts seem to be an American tradition. Since the American Revolution, American citizens have fought the payment of what they felt were unjust taxes. School taxes have not been any exception to this. Proposition 13 (California), Proposition 2 1/2 (Massachusetts) and the New York State 2% property tax cap all have marked similarities but were born during radically different times. In this short essay, the author will research the three and compare and contrast their initial intentions, successes or failures. We will consider whether these laws were instituted by the vote of the public or of only their representatives. Further we will consider if municipalities or other unites were impacted in the same manner, namely schools, towns, village and/or cities. Primarily, this examination will be from the perspective the educational leadership as these financial topics impact education and the operations of their school districts.

Analysis

Property taxes…… [Read More]

How Can Tax Cuts Revive the Economy

Tax Cuts

How Tax Cuts Stimulate the Economy

There are two basic economic theories competing in America today: Keynesian and Classical. Keynesian economic theory calls for the government to influence the economy through government expenditures and collecting of taxes. Classical economic theory asserts that market forces keep the economy in balance and the government should not interfere. However in a strange way, both theories claim tax cuts can stimulate economic growth, the only difference is who gets the tax cuts. Tax cuts for the ordinary American, according to the Keynesian supporters, will put more money into the economy, stimulating economic growth. On the other hand, Classical economists claim that tax cuts for the wealthy will stimulate investment, create jobs, and stimulate economic growth.

Many Classical economists assert that an "Expansionary Fiscal Policy" can, through the lowering of taxes, increase the productivity of the economy, if the tax cuts are aimed…… [Read More]

Low Income Housing Tax Credit

Income Tax

What are the pro's and con's of the Bush Administration's proposal to convert the Section 8 voucher program into an aggregated block grant to the state?"

This is a paper that outlines the arguments of why Bush Administration's proposal to convert Section 8 voucher program to block grant is not feasible.

The Section 8 voucher program, which was started in 1976, helps approximately 2 million low-income families and people with special needs, such as the elderly and disabled, pay for rented housing. The program can also be used by these people to save up for down payments when purchasing housing. The program is administered by the Department of Housing and Urban Development, which currently distributes the funds to low-income families through public housing agencies.

Typically, citizens contribute a maximum of 30% of their monthly income in rent, and the Government pays the rest. Families who make less than…… [Read More]

Canada & USA Tax Treaty

Tax Planning -- Employer (II of II)

Tax Planning - Employer

The marketplace that businesses operate in has become more and more globalized and international in nature, not to mention extremely competitive. This particular report will focus on the employer and their tax implications when it comes to operating and/or headquartering in one or more countries around the world. The prior report focused on the employee. While the implications for the employee are complicated and diverse enough, they become even more complicated when speaking of the employer, and for a number of reasons.

Considerations

Just as there were a number of considerations relevant to the employee and their tax treatment, there are a number of tax considerations that USCo will need to consider for themselves and they are as follows:

The actual headquarters location (nation, state/province and county/city)

The actual locations outside of that home country (or state and city)…… [Read More]

How Do Taxes Affect Taxpayers

Taxes

Tax laws affect taxpayers because they create the taxpayer and govern all aspects of the taxpayer's obligation to the state. Without tax law, there would be no taxpayer; it is the tax laws that create the obligation to pay taxes, and the punishments for non-payment. Tax laws establish who pays taxes, at what rate they pay taxes, the punishments for late or non-payment, and the establish the tax collection body (IRS) and grant that body the authority to run the tax system. Taxation is one of the major ways in which the state can influence behavior in a democratic country. States have long reserved the right to taxation, and the exclusivity of this right has been a feature of government for centuries. Today, there are usually specific rules regarding what layer of government can levy taxes for what purpose. Taxes have different names, too, including excise taxes, income taxes,…… [Read More]

Are Tax Avoidance Strategies Effective

Tax Avoidance & Firm Growth

What follows in the next few pages is a review of whether there is a correlation between tax avoidance with corporations and firm growth. Indeed, looking at the literature reveals that the evidence is mixed but that the overall answer is a condition "yes," that there can indeed be a link between tax avoidance and firm growth. To explain the conditional nature of the answer garnered, one can look to the work of Desai, Foley and Hines (2006) when they assert that "firms with sizable foreign operations benefit the most from using tax havens, an effect that can be evaluated by using foreign economic growth rates as instruments for firm-level growth of foreign investment outside of tax havens" (Desai, Foley & Hines, 2006). They further state that "one percent greater sales and investment growth in nearby non-haven countries is associated with a 1.5 to 2%…… [Read More]

Income Inequality Exploring and Explaining

The income and wealth gap continues to grow at a faster and faster rate because there is ever more power to affect policy provided to those that have such substantial incomes.

Education and Healthcare

There are other less direct ways in which the income gap is self-perpetuating, as well, establishing a system that purports to be meritocratic -- based on merit, where everyone has an equal chance to succeed based on their own skills and efforts -- but that in reality is stacked in favor of those already endowed with financial success (the Economist, 2006). Access to education is heavily mediated by the ability to pay for this education, and this is true at all levels, from elementary school through to undergraduate and graduate schools; wealthy parents can afford to hire tutors for their children, to pay high fees for prestigious private schools that confer advantages in higher education and…… [Read More]

Tax Expenditures One Typical Characteristic

In the meantime, you have a normal, functioning economy. Keynes's theory impelled a host of interventionist economic policies during the Great Depression and formed the essence of Roosevelt's New Deal which influenced Britain and other countries in dealing with their own related depressions. The Great Depression in all countries had compelled people to hoard their money causing the economy to stop at a standstill. Keynes's theory urged governments to step in and to encourage public spending, which the government did by both increasing the money supply and buy buying things itself. In this way, government spending is more effective than taxes since raise in taxes will only serve to dissuade people from buying. An attitude which leads to reduced consumerism, more businesses closing, less employment, firing of current workers, and reluctance to engage in discretionary spending.

2. Division of Government Functions

Our federal system divides responsibilities between the various levels…… [Read More]

Tax Return Reporting

Tax Return Reporting

In the intensely personal working relationship which is necessarily fostered between tax preparers and their clients, a great deal of trust is required to assure that each party acts in accordance with the rule of law and the boundaries of ethical conduct. Certified Public Accountants (CPAs) and other recognized tax preparers are morally, ethically and legally bound, both by federal tax code and professional pride, but the demands of clients who are interested in preserving their own financial assets often conflict with these priorities. From the disclosure of certain questionably gained assets to the reporting supplementary income to the Internal Revenue Service, individual taxpayers often subject their tax preparers to undue pressure and untenable requests. If a client employing my tax preparation services asked that I not report certain information which may implicate them with the law, I would be considerate of their personal circumstances but ultimately…… [Read More]

Tax Memo Pension Payments Mr Jones From

Tax Memo: Pension Payments

Mr. Jones

From, Tax Accountant, CPA

You are the president of a corporation owned by yourself and other family members. Your salary from this corporation during the year in question was $48,000. During this same year, $12,000 was also contributed by the corporation to a pension plan held on your behalf. You believe that this contribution should not be considered a part of your taxable income for the year in question. The IRS agent conducting an audit of the year in question believes the pension plan amount should be considered when making a determination of reasonable compensation.

The issues in this case are (1) whether it is proper to include the pension plan in a determination of compensation, and (2) if such inclusion would affect the determination of the compensation amount of any tax liabilities for the corporation or Mr. Jones during the year in question.…… [Read More]

Tax Federal 'Sin Taxes ' to

Sugary sodas contain corn syrup, but the American Agricultural Department subsidizes American farmers for growing corn, and this is one of the reasons that high-fructose corn syrup is so ubiquitous in the food supply. We are taxing corn syrup and subsidizing it at the same time, in other words. "The bigger issue, which the industry neither can nor particularly cares to rebut, is that the product [corn syrup] exists at all. We pump absurd quantities of cash into subsidizing corn (we also have a huge tariff on Brazilian sugar cane, incidentally). Over the past 10 years alone, Congress has appropriated more than $50 billion to encourage farmers to grow the stuff. But people don't want to eat $50 billion in subsidized corn. And if the cobs just sat around developing mold, Congress would cut off the spigot. Enter high fructose corn syrup, which sucks up the subsidies and created a…… [Read More]

Tax Liability a Preview of Capital Structure

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 total financing, 80% in this example is referred to as the firm's leverage. This leverage has implications on the entire firm. For example, leverage in many respects is a double edges sword. On one hand, leverage can amplify gains for firms. However, if used incorrectly, leverage can also amplify loses. As such, firms must be cognizant of its capital structure as complacency can hinder overall business performance. Debt and equity financing, can have a profound implications on the…… [Read More]

Tax Service Profession Is Both

If the decision is made to remain affiliated with the taxpayer, the member should ensure that the error is neither repeated nor perpetuated.

Conclusion

The rules and regulations implemented for tax service providers and other officials working with taxpayer clients are established in order to ensure the stability and ethical values of the position. Taxpayers are very important, as they uphold the economics and financial health of their community and their country. In this regard, it is the obligation of the tax service official to respect both the system and the client by upholding a high level of ethics.

In turn, the taxpayer should assist the preparer in the mission to provide accurate information that is free of errors. In the case of errors, it is important to emphasize that the system does provide for human error. If either the tax preparer or the taxpayer can be shown not to…… [Read More]

Tax Expenditure Budgets An Interstate

Pennsylvania, on the other hand, does not create its budget using this framework; though there are certainly credits, deductions, etc., that are similar to the items listed as tax expenditures in the other states' budgets, this is not the perspective the State of Pennsylvania applies to its budget (Pennsylvania Office of the Budget, 2012). This is perhaps reflective of the increasing criticism the tax expenditure framework or model has received from primarily conservative policy makers and analysts, that see the practice as less straightforward in its appraisal of revenues and expenditures than could be accomplished (Burman, 2003).… [Read More]

Income Gap Between the Rich and the Poor of America

Income Gap

Income disparity does not allow those living in poverty to climb out and join the middle class, and keeps the most wealth, power, and privilege in the hands of a select few.

Topic Sentences to introduce references

Census Income Data

Worsening American Income Inequality: Is World Trade to Blame?

Income and Wealth Inequality in the United States

A Tool for Measuring Income Inequality

The Two Nations

This paper analyzes income levels in the United States. Specifically, it discusses how there are two distinct nations in the United States, one with people who have income levels in the top 20%, and those with income levels in the bottom 20%.

As the disparity grows between rich and poor in America, so does the inequality in our country, which threatens the very fabric of our lives. Income disparity does not allow those living in poverty to climb out and join the…… [Read More]

Tax Cuts Do Tax Cuts

Beaton also adds that low and moderate income people tend to spend money on goods and services that are more likely to result directly in jobs and incomes in the community (the spending continues multiplying on a secondary or tertiary basis). Higher income people spend in a way that contributes to "leakage" to their local economy by taking trips to buying non-local goods and services.

The implication of Beaton's article is that tax cuts should be directed at low and moderate income people to stimulate the economy. Perhaps, from a strictly MPC point-of-view, this is correct. but, high income people also invest which stimulates the economy and this should have been explored as well.… [Read More]

Tax Deductions for Default

Tax Deductions: Are Unpaid Loans Tax Deductible?

John loaned his friend Jack $1,000. Jack did not repay the debt and left town. John wants to know if he can claim any tax deduction, and, if so, what is the character of the deduction? However, to answer John's question, one must first find out more information about the nature of the loan. This is critical because there are two broad types of loans and debts: business loans and personal loans. Furthermore, under the correct circumstances, it is possible for people to take tax deductions for certain types of business loans and personal loans. Knowing whether John made Jack a loan from his personal money or from his business money is the crucial first step in determining which, if any, Internal Revenue Service (IRS) regulations or tax laws will permit John to deduct the unpaid debt.

If John is a business owner…… [Read More]

Tax Bibliography Anderson R Rice

Accessed 15 September 2009. http://www.nchc.org/facts/coverage.shtml

Newhouse, J. (1993). Free for all?: Lessons from the RAND health insurance experiment. New York: Harvard University Press.

Physicians for a National Health Program. Accessed 15 September 2009. http://www.pnhp.org/

Quadagno, J. (2005). One nation, uninsured. New York: Oxford University Press.

Sains, a. (2002). "European and U.S. health insurance converging." Europe 420, pp. 11.

Salmon, K. (2007). "Ailing U.S. health insurance system under the spotlight." PharmacoEconomics & Outcomes News 524, pp. 3-4.

Stevens, W. (2003). Health insurance: current issues and background. Hauppauge, NY: Nova Publishing.… [Read More]

Tax Cuts Help to Revive

With the extra money that businesses make, they not only invest it, but they pay some of that in taxes as well. Those taxes go to government, which can spend more. Government spending also fuels increases in business income. As governments collect more taxes from business, they can reduce consumer taxes further.

The net effect of all of this is that lowering taxes on consumers can have an exponential effect on increasing the Gross National Product. Tax reductions not only have a direct effect, but they have indirect effects that filter throughout the nation's economy. In this way, cutting taxes boosts the economy.



Cloutier, R. (2009). Do tax cuts stimulate the economy? Investopedia. Retrieved November 29, 2009 from http://www.investopedia.com/articles/07/tax_cuts.asp?viewed=1… [Read More]

Tax the Benefit Principle of

Medicare, in addition to covering the elderly, is made available to lower-income individuals, and other direct assistance programs also go to these individuals. Combined with other goods and services such as road maintenance and other infrastructure, national security, etc., which are all consumed essentially evenly (again, in one perspective), this would mean that those at the lowest end of the economic spectrum consume the most and should pay the most -- a regressive tax that places the largest burden on those with the least ability to pay (417). In another perspective, however, those with high levels of income, wealth, and consumption benefit a much greater degree from the general services the government provides. The owner of a company benefits from the roads each time an employee drives into work, and from airwaves every time an Internet sale is made, and so on. Calculated thus, the benefit principle would lead to…… [Read More]

Accounting Finance Alternative Approach to Taxes

The common guiding principles of economics provide little direction. As a consequence, U.S. international tax policy is a clutter of rules with a diversity of political and economic reasons. It is frequently described as a concession that strikes a balance. Policy leans toward tightening foreign tax rules and putting foreign income on equal footing with U.S. income when it is thought that foreign investment hurts the U.S. economy. Then policy leans toward relaxing the rules and giving foreign income favorable treatment if it is thought that foreign investment promotes U.S. interests (Sullivan, n.d.).

Due to the fact tat every government charges taxes by its own process and at its own rates, the ensuing system of international taxation often warps investment and adds to reductions in international economic well-being. The environment of these alterations depends on the way of taxing profits from international investment. If investment earnings are taxed only at…… [Read More]

Lakes Tax Research Memo Personal Injury Winning

Lakes

Tax Research Memo

Personal Injury winning treatment and other issues research

XYZ CPAs

NearLakes City

John Smith tax issues

Treatment for purposes of Federal Tax Income of $300,000 fee received out of the amount awarded by Jury.

Applicable Law:Any winnings in a personal injury lawsuit that cover the treatment of physical injuries are not taxable except for attorney fees which are taxable. IRC SEC 104(a)(2).Taxability also depends upon the place of residence of the taxpayer.

$300,000 received by John Smith as fees from jury award is taxable for federal tax income purposes.

Treatment for purposes of Federal Tax Income of $25,000 expenses paid upfront and received out of the amount awarded by Jury.

Applicable Law: Any winnings in a personal injury lawsuit that cover the treatment of physical injuries are not taxable except for attorney fees which are taxable. IRC Sec 104(a)(2).Any expenses can be claimed as a deduction.Taxability…… [Read More]

California Tax Payers Who Commit

Cancellation of debt in this instance may not be taxed in this manner but might be taxed another way.

Certain farm debts: This exemptions only applies to debt incurred directly from an operation of a farm. If more than half your income from the past three years came from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income.

Analysis

Since 2007 and 2008, California conformed, with modifications to IRC section 108 (a)(1) (E) that allows a limited amount of COD income resulting from the foreclosure or short sale of a qualified principal residence to be excluded. This exclusion does not currently apply for any foreclosure or short sale that occurs on or after January 1, 2009. Danny made his short sale in 2012. "The Mortgage Forgiveness Debt Relief Act of 2007 was enacted on December…… [Read More]

Federal Government Tax the Main Source of

Federal Government Tax

The main source of government income is taxes. The government taxes various organizations in the economy differently to ensure that adequate revenue is collected. Corporate use loopholes in the tax system to reduce the tax paid to the federal government. The government should eliminate these loopholes to improve tax collection. Some taxes such as gift and estate tax as they are counter productive. Changes made to the federal tax collection systems will increase the tax collected by increasing compliance.

Research the most common tax loopholes used by corporations and partnership to avoid paying federal income tax. Discuss two (2) loopholes identified and what strategies you would recommend to the federal government for closing these loopholes.

The federal government gets most of its revenue from collection of tax used to fund most of the expenditure. The government should ensure that the tax collection avenues are free from loopholes…… [Read More]

Itemized Deductions the Federal Tax System That

Itemized Deductions

The Federal Tax system that is managed by the Internal Revenue Service (IRS) contains many complicated rules and regulations that presents many problems and issue for taxpayers wishing to abide by these laws. Itemized deductions is one method of self-reporting that taxpayers choose to use to file their returns. The purpose of this essay is to examine the use of itemized deductions on federal income tax returns. This investigation seeks to understand the history of this application while also evaluating the complex nature of the qualities that determine the appropriateness of this selection. This essay will also examine the effectiveness of itemized deductions as part of the larger component of income tax returns. The essay will conclude by highlighting certain examples where IRS audits were started because of misuse of the itemized deduction.

History of the Itemized Deduction

According to the Internal Revenue Service's web site its history…… [Read More]

Professional VAT Value Added Tax Advice for

professional VAT (value added tax) advice for the managing director of the Grape Limited. The Grape Limited is a U.S. multinational company and decides to incorporate new companies that provide supply management services, management company, manufacturing company and marketing companies. The management company will deliver supply management services to foreign services providers. On the other hand, the manufacturing company will focus on the electronic parts, and marketing company will deliver marketing services for the parts manufactured by the manufacturing company.

VAT Registration

The VAT (value-added tax) is a government levy on any goods or services produced in the Republic of Ireland. The first condition that must be fulfilled before Grape Limited demands for the VAT numbers is to incorporate its businesses in the Republic of Ireland. After the company registrations, the next step is to apply for the VAT number. To apply for the VAT registration number in the Republic…… [Read More]

Global Tax Treaties UN Model and OECD

global tax treaties, UN model and OECD model with the view of analyzing their consideration towards rights to capital and tax income. By throwing light on differences and similarities among the models, the fundamental logic of each of them is explained. The article explains the prospecting policies of consideration when tax treaties are to be signed. It is because there is strong need to enforce a flexible but more aggressive strategy. The Section 1 of the article discusses rights about tax earnings through immovable property. The Section 2 is about business profits. The Section 3 throws light upon income from investment channels like royalties, interests and dividends. The Section 4 describes the capital gains. The conclusion of the article is given in Section 5.

Right to tax income from immovable property

Because of well-known significant relationship between the country of source of the income and the source of income itself,…… [Read More]

Business Income Refers to Any Income Usually

Business income refers to any income usually realized for the execution or transaction of business activity. This indicates that business income is the aspect of earned income from the perspective of business transaction or activity. In order for the business income to apply to the aspect of the taxation system, it is essential to classify business income as ordinary income. Business income consists of business expenses, business losses, and business profits. It is the difference between revenues and expenses of the process of business transactions. This indicates that business income can be positive or negative within the financial year depending on the size of the expenses and revenues. Business income is received from the transactions or sales of products or services within the defined market.

Question Two

OECD model treaty defines a clear perspective in relation to the handling of the business income. This is through indicating that the income…… [Read More]

Have Work Incentive Programs in US Been Effective in Promoting Employment Among Low Income Families

Incentive Programs Among Low Income

The effects of work incentive programs in encouraging low income individuals to participate in employment depend on the income thresholds of reforms in whether the individual gains benefits that are equal to or greater than what they would receive by not working. The factors in the determination include after tax income plus benefits, such as Earned Income Tax Credit (EITC) and fixed work costs, compared to the total change in revenue received. If the loss of welfare is greater than the total change in revenue, work incentives have no value and discourage employment participation. On the other hand, if the total amount of changed revenue is greater than the welfare loss and compensates for fixed work costs, incentives encourage employment among the low income.

The Tax Reform Act of 1986 (TRA86) expanded EITC benefits by increases in the standard deduction, personal deductions, and favorable tax…… [Read More]

National Sales Tax

sales tax reform in America. Specifically it will discuss the idea of an alternate tax system, the National Sales Tax and compare it to the current tax code. A new way of collecting taxes seems much more fair and equitable than the current income tax method, which seems antiquated and unfair. Some large corporations and America's wealthiest people pay very little or no taxes through tax loopholes, which makes the system, rely on the people who can afford it the least. One expert notes, "Certain business entities such as partnerships, small business corporations and limited liability companies are treated for tax purposes as conduits and pay no federal tax at the entity level" (Boyd, 2005). There has been talk about developing a more equitable system that would be fair to everyone, not just a few. Developing a national sales tax system could help decrease the budget deficit, make the system…… [Read More]

U S Tax Policy Although Smokers

Works Cited

Thorndike, Joseph J. "The IRS Is Hiding Its History." The Washington Times.

December 19, 1997, p. A23. February 18, 2008. http://www.taxhistory.org/thp/readings.nsf/cf7c9c870b600b9585256df80075b9dd/9de7fcd59915a3be85256e430079327d?OpenDocument

Question

After 9/11, the Federal Reserve Bank, then led by Alan Greenspan, used monetary policy reduced the interest rate, or the rate that consumers must pay to borrow money. This did encourage individuals to spend more. However, it is still debatable if this was the most vital component in extricating America from the throws of economic recession. Government spending, or fiscal as opposed to monetary policy, is often seen as a more direct and superior way to rapidly change economic conditions. Fiscal policy was required to stimulate America's recovery from the Great Depression, according to conventional wisdom, although some still argue that it was the Hoover administration's monetary policy that was ineffective, not that monetary policy was ineffective altogether.

But most economists believe that, to get the…… [Read More]

Federal Sales Tax

Federal Sales Tax

The purpose of the proposed Fair Tax Act of 2003 is "to promote freedom, fairness and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the states." (Boortz, 2003). Unfortunately, there are a lot of beliefs about the proposed legislation that simply aren't true. Fears range from inflation, lower economic growth, unpredictable revenue shortfalls and unfairness to the poor. This paper explains that these concerns are not only false, but that the exact opposite is true in most instances.

One of the common misperceptions of the Fair Tax Act is that it will fuel inflation and dramatically impact the demand for goods with high price elasticities. However, it's likely that the sales tax will have minimal impact on prices. This is because there are already embedded taxes on all products…… [Read More]

U S Tax in the Treatment US Tax

U.S. TAX in the TREATMENT

US Tax Treatment

Items of income considered earned from within the U.S.

Earned income can be defined as the payment for the performed personal services, for example wages, professional fees or salaries. The list below provides the categories of the types of income tax. It is essential to appreciate the fact that deductions made on the income are determined by the category in which the income falls. The column with heading variable income consists of income in the category of either unearned or earned income or even both (Fraser, 2009).

Types of income

Variable income: they include rents, royalties, and business profits

Unearned income: such incomes include annuities, pensions, social security benefits, Alimony, gambling winnings, capital gains, and interest dividends.

Earned income: tips, professional fees, bonuses, commissions, wages and salaries

Besides the types mentioned which always occur in the form of cash, other taxable sources…… [Read More]

Capital Gains Tax in Australia Capital Gains

Capital Gains Tax in Australia

Capital gains tax refers to a type of tax levied on capital gains incurred by organizations or individuals. The capital gains refer to the profits that an organization or individual selling a capital asset obtains through selling an asset at a price higher than the original price. In many countries, the amount of capital gains tax takes into consideration the type of investment and the holding period of the asset. Australian capital gains tax takes a proportion of all achieved capital gains. Capital gains are not separate tax but part of the income tax on individuals and corporations upon disposing of capital assets. Australian capital gains tax exempts personal properties such as home, car, and furniture. Australian residents in any part of the world are subject to capital gains tax.

Issue 1. Moodly's Conversion of her main residence.

Moodly being a childcare worker, wishes to…… [Read More]

Property Taxes Are Regressive or

676).

Some argue, however, that the assessment of property taxes in the United States has become regressive. That is, low-income homeowners pay proportionately more of their income on property tax than their high-income counterparts. This situation has developed as homeowner incomes have slowed while property values have raised rapidly. Not all experts agree on whether property taxes are regressive or progressive. Those who argue that property taxes are progressive point to the fact that property taxes tend to reduce the return on capital (p. 690). The net effect of this is that investment in poorer areas decrease and so do rents so that property values decrease as well. The lower property values serve to decrease the property assessments and, therefore, the corresponding property tax, however, there is a delay in the timeframe.

Whether or not property taxes are regressive or progressive will continue to be debated. Regardless, such taxes have…… [Read More]

Carbon Tax in Australia

Carbon emissions during recent decades have generated much controversy and some communities have taken harsh measures in order to combat effects associated with the process. The Australian Federal Government introduced a carbon tax of $23AUD per ton of emitted carbon dioxide on a series of fossil fuels in order to effectively deal with pollution. Finances gained from the process have been used to reduce income tax and provide Australian citizens with several benefits. While the legislation has been welcomed by many local and international bodies, some have frowned upon it and have called for its repeal on account of how it produced much damage both on a small level by increasing cost of living and on a larger level by preventing businesses from being able to experience progress.

Tony Abbott's article "THE COALITION'S PLAN TO ABOLISH THE CARBON TAX" is among the most recognized criticisms regarding the carbon tax in…… [Read More]

Small Business Taxes Small Business

The same goes for business-related periodicals and magazines. (Dratch 2008, p. 2)

Mileage: Once again, this involves careful bookkeeping, but the deductions can add up. Keep a dated log of all business-related mileage, tolls, and parking costs. According to the IRS website, the 2009 IRS deduction rate for business-related mileage was 55 cents per mile.

Travel, Entertainment, and Meals: For the small business, 100% of travel and entertainment expenses are deductible, as well as 50% of meal expenses. It should come as no surprise that these deductions must have supporting documentation showing them to be business-related.

Shelter Your Income

Investment property can be a valuable tax shelter. The IRS allows you to shelter up to $25,000 in an investment property, but there are strict requirements. You must own 10% of the property as an individual owner, not through limited partnership. And you must be involved in the "active management" of…… [Read More]

Penn Tax Memo Tuition Tax

In addition, the estimation of seventy-seven thousand individuals that would be able to receive an additional refund from the tax credit suggests that it could actually cost the state a substantial amount of money to operate this program. These students would not only pay no taxes, but would actually receive money from the state -- a minimally employed student that owed no income tax to begin with could actually receive a refund of eight hundred dollars (forty percent of two-thousand) or more. Clearly, there would be a major impact o the overall state budget from the cost of this program. Though a billion dollars doesn't go as far as it used to, it is still a substantial portion of the state's total sixty-three billion dollar budget (POB, 2012). Though the money saved or sent out to individual taxpayers through this tax credit would most likely be used to make purchases…… [Read More]

American Tax System vs Other Countries the

American Tax System vs. Other Countries

The federal government first imposed an individual income tax in 1862 as an emergency means of financing the Civil War. It also established the Bureau of Internal Revenue, predecessor of the Internal Revenue Service. Tax rates were 3% on income from $600 to $10,000 and 5% on income above $10,000. Later in the war the maximum rate increased to 10% of income." (Encarta)

My how times have changed. This paper will compare the tax systems of four different countries to the American tax system. The four countries that have been chosen are South Africa, Mexico, Hong Kong, and New Zealand..

First lets attempt to briefly (if that were possible) explain the American tax system.

The American Tax System

America has a progressive tax system meaning the greatest tax burden is on people who have the most income. The American tax system can be described…… [Read More]

Dividend Tax

Dividend Tax

Capital gains and dividend taxes were both initiated in the early 1970's, by the Democratic Party. Before dividend taxes were enforced, the government made its money through higher aftertax yields, The dividend tax was originally supposed to be a progressive measure, so that the wealthiest paid correspondingly more than the poorest because they had benefited more. At this time, only the wealthy invested in stocks. This is no longer true. Most middle-class people today are investors in the market and they do not have the expensive accountants hired by the rich to shield their investments from tax.

Investing in the stock market has become far more widespread over the last two decades, as 84 million people - representing nearly half of all American households - owning stock. Tax-deferred investment tools such as 401(k) plans and individual retirement accounts (IRAs) have placed millions of Americans who make $60,000 or…… [Read More]

Pay as You Go Taxes

The people who opt for early retirement stop staring contribution to pension system where as they start getting the benefits of pension system. (Prieto, 1997)

The traditional unfunded social security system is facing lot of problems in the United States and other developing countries with the increasing life expectancy of the people. The cost of providing any level of service is directly linked to the percentage of people who are employed against people who have already retired and enjoying pension in a pay-as-you-go system. The problem is continuing and increasing with people's move towards early retirement which is encouraged in many countries social security system. Even in the event of retirement being stabilized, the steep increase in the ratio of the aged against that of working age is contributing to the substantial raise in the cost of pay-as-you-go system. The United States estimators, who work for social security system, forecast…… [Read More]

Sourcing Equity Tax Management

Sourcing equity / Tax management

Contrasting between global tax systems

National taxing has been proven to affect economic decisions made by MNEs. Typically, the settlement of taxation will take two different approaches, which are the worldwide approach and the territorial approach. The first approach will levy taxes based upon the income earned by firms that are controlled in the host country. Therefore, an investor earning income internationally would find his/her income taxed by the local tax authorities. For example, a country such as the United States will tax the income earned based upon firms that are located in the U.S. whether the income is received by firms based in the United States, domestically sourced, and/or foreign sourced (Moffett, Stonehill & Eitemen, 2012). However, an issue that arises is that the taxation does not take into consideration the foreign companies that are based in the United States.

Therefore, the territorial approach…… [Read More]

Basics of Consolidated Returns and Gosystem Tax Rs Taxation

Consolidated Tax Returns and GoSystems Tax Software

Consolidated Tax Returns

The consolidated tax return, in simple terms, is "a method by which to determine the tax liability of a group of affiliated corporations" (Pratt and Kulsrud 8-2). It is based on the assumption that the business operations of affiliated companies represent a single entity and that, hence, the group's aggregate income ought to be taxed, as opposed to the separate incomes of the member corporations. It would be prudent to mention, however, that the return does not simply report the sum of the taxable incomes of all member corporations as one large, conglomerate entity; rather, it follows a set of special Treasury regulations in determining how to make adjustments for intercompany bargains, and establishing which items to state on a consolidated basis (Pratt and Kulsrud 8-2).

The History of Consolidated Tax Returns

The consolidated tax return traces its origin to…… [Read More]