The Taxation System: Fair or Unfair
The Taxation System: Fair or Unfair
In the taxation system, the government collects the tax from the citizens of its country in order to fulfill the responsibility they have, i.e. to provide clean water, proper roads, health care services, sanitation facilities, and education. To fulfill all the duty for the welfare of the public; the government needs billions of dollars. With this being said, the government collects the money from the public in the form of tax. According to me, the taxation system is fair because taxes are necessary for the development of the country. Tax is taken for the social welfare of the citizens of the country. Taxes are paid to the government so that they provide all the facilities related to the infrastructure that we are enjoying every day. Essentially, we are paying these taxes to the government for our own benefits.
The tax system in the United States started in the 1700’s. The United States of America is a federal republic which is separated into three types of government, i.e. local, federal, and state government. In United States, taxes are collected at these levels which include imports, payroll, income, estates, gifts, property, sales, dividends, capital gains, and on the various types of fees. (Almanac, 2003). In the United States, the tax is one of the main sources of the revenue for the government. Taxation in the United System can be traced when Great Britain applied the tax to many things i.e. from tea to the documents of business and any legal matter that requires the stamp tax to colonists (Efile, 2017).
According to Thornburrow (2017), the taxation system is fair because federal income tax system is established to fund the government of the country so that they can fulfill their responsibility in order to protect the country and for the welfare of the public that lives in that country. Tax is taken from the people according to their income, which is taken yearly, directly from paycheck in which every person write the government check at the end of every year. A middle-class person pays 15 to 35 percent of his income on tax after the allowed deductions on himself, spouse and children which can be easily paid by him.
According to the statistics, the 75 percent revenue of country comes from the income tax that is paid by only one percent of the population (Thornburrow, 2017). I can conclude that if tax system were ended, there would be no source of income for the country. The citizen of the country will lack services they want from the Government.
Gleckman (2012) says that the taxation system is fair because it is collected from all the peoples that live in the country according to their total income for the welfare and development of the country. People pay the tax according to their ability that further depend on their income. Also, the government provides all the facilities equally to the people that live in that country such as sanitation, water, health services, education to all and much more, etc. (Gleckman, 2012). According to me, if people are paying tax as per their income, there should be no issue to implement the same.
According to Grier (2012), in the United States federal tax code is in progressive because the richer people in the country pay, the higher percentage or part of their income to the government of United States as compared to the middle class or other people who make the taxation system fair. The people of US who have more money have to pay more tax. So, they share tax from their income greater to the US government. They are paying a higher rate of tax on their higher income which they earn. (Grier, 2012)
Tax rates do not always depend on the economic growth of the country. Higher tax rate on cigarettes and alcohols is to reduce its consumption habits among peoples. Income tax focus on savings, investments, and on the jobs. Thus, sometimes tax is collected for the good use. Thus, I completely agree that how the tax system can lead to significant amount of positivity, better environment and increase in economic growth. Along with this, it helps to enhance the living standard of the people.
So, according to my point of view, taxation system is fair because the government of every country has the requirement of money to run the country efficiently and towards the development of the country. The government provides the facilities equally to all the peoples that live in that country such as proper roads, sanitation, education, protection, health care services and many others from the tax which they collect from the people of the country.
But the opposing viewpoints also exists. There are some people who call “taxation system” as an unfair approach of the Government to collect money. According to Rugy (2011) taxation system is unfair because the amount of tax that the people pay to the government country in which they live is not the value which they should pay to the government. A person pays the amount of tax on the income which he earns, the capital interest and the other types of income which a person earn which makes the taxation system unfair.
Unfair tax treatment on the wage income is a comparison to the wealth income. A fair taxation system would have the narrow disparity between the income from work and on the tax that is applied to the income. The people of United States take too much time to complete their taxes which make the taxation system unfair. It is estimated by the National Small Business Association that 40 percent of small family businesses spend more than 80 hours of their time on dealing with the federal taxes (Communication office, 2015). Thus, significant time is wasted on the tax activities. In the United States, the tax code is filled with loopholes way which makes the financial products and tax system more complicated. There are no basic standards for the return tax preparers. Without that, many tax-returns are unethical and incomplete. All these things show that the taxation system of United States is unfair.
In conclusion, I can say that despite the number of various opposing viewpoints, the taxation system of United States is fair. Although I believe the taxation system is fair, I understand that it can also be unfair depending on the conditions of the different country that in which way they collect the tax from the peoples. But according to me, the taxation system should be fair in all the countries, and the government should provide all the facility to the people of the country which is for their welfare and for the development of the country.