Free

Tax Reform - Essay Example

Comments (0) Cite this document
Summary
 Tax Reform Name: Institution: Tax Reform Since the 19th century, Americans seek tax reforms to reduce forms of taxation subjected on citizens and corporations. In the US, the issue of taxes is a touchy subject with the government and other stakeholders seeking to find a mutual ground (Shapiro, 2005)…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER95.2% of users find it useful
Tax Reform Essay
Read TextPreview

Extract of sample
"Tax Reform"

Common Tax Loopholes In principle, the US has one of the highest rates of corporate tax globally. However, in practice, US corporations pay low taxes. The Government Accountability Office estimates that the average tax burden is 25.2% because corporations use loopholes to escape taxes. This lack of tax payment emanates from the many exceptions and loopholes in the US tax code (Reinhart, 2008). Some of the common corporate tax loopholes include deferral of income earned overseas, deductions for overseas shipping jobs, and reductions for domestic production, last-in first-out system of accounting, deduction of accelerated depreciation, corporate jet reduction and deduction of punitive damages (Shapiro, 2005). Deferral of overseas income allows multinational companies to defer payment of income taxes on profits realized overseas until they transfer the profits home. In reality, corporations leave their profits overseas thereby deferring taxes indefinitely (Shapiro, 2005). In addition, the transfer pricing accounting technique allows corporations to transfer profits from the US to offshore havens so the profits become overseas earnings. The federal government accrues a $100 billion loss per year because of offshore tax abuses (Steuerle, 2008). The federal government should prohibit transfer of profits earned in the US to offshore accounts by illegalizing the transfer pricing system of accounting. The government should also require companies to account for overseas profits and pay taxes on such profits (Reinhart, 2008). Companies also elude taxes through deduction of punitive damages. The tax code provides that when companies pay punitive damages, they can write them off as necessary and ordinary company expenses. Therefore, after paying punitive damages, companies typically pay lesser taxes than they should pay. For instance, Exxon’s settlement of $1.1 billion for the oil spill in Alaska, in reality, cost the company $524 million after deducting taxes. It is paramount that the federal government does away with this deductibility to seal the loophole (Steuerle, 2008). Benefits of S Status The US government established rules on S corporations in the mid 20th century to simplify the process of business ownership. However, when a company attains S status through the ratification of the IRS, the company’s owners or shareholders enjoy lenient taxation protocols. In S corporations, profits and losses pass to shareholders thus tax payment occurs once (by individual shareholders). S status for corporations is, therefore, disadvantageous to the federal government because S corporations are ineligible from paying federal income taxes (Reinhart, 2008). While some states charge state tax to S corporations, the companies are still ineligible from federal tax (Shapiro, 2005). The federal government also suffers loses when company owners give personal loans to S corporations (Steuerle, 2008). When S corporations incur losses, owners can inject company capital then deduct the losses from their personal returns. This means the business owner will pay low amounts of personal returns to the government. Gift Tax Laws The US tax law on gifts is quite unfair to the taxpayer. This law on gifts holds that a donor pays tax on the transfer of money or property to another person if the donor receives nothing in return for such a transfer. The gift tax law applies regardless of whether or Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Tax Reform Essay Example | Topics and Well Written Essays - 750 words”, n.d.)
Retrieved from https://studentshare.org/finance-accounting/1452380-tax-reform
(Tax Reform Essay Example | Topics and Well Written Essays - 750 Words)
https://studentshare.org/finance-accounting/1452380-tax-reform.
“Tax Reform Essay Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.org/finance-accounting/1452380-tax-reform.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
The Fair Tax should be Implemented in the United States
This is as a result of taxation on the interest that is earned, capital gains and the returns to the shareholders. The regressive payroll tax burden makes people who earn wage in the society and those who own businesses to struggle. (Legislative Branch, 2011, p20190) The essay aims at discussing main points regarding the implementation of fair tax in the United States.
7 Pages(1750 words)Essay
Tax Preparation in the USA
The author states that although a tax form has been simplified, some 40% to 50% of all tax filings have been completed by the tax preparer, of which there are four types, namely: certified public accountants, lawyers, an enrolled agent (someone who passed special examinations given by the Internal Revenue Service) and unenrolled tax preparer.
3 Pages(750 words)Essay
Assignment 3: Tax Reform
Individual shareholders paid tax at a rate of a minimum 15% on qualifying corporate dividends, and about 10 to 20% lower than them federal tax rate which is at times as high as 35%. Those taxpayers who are currently paying a marginal federal tan of 10 to 15% pay no taxes for qualifying dividends as well as any long-term capital gains.
5 Pages(1250 words)Essay
Public Finance: Tax Reform Writing Assignment
Through publication of annual finance act and the budget, the government can be able to achieve environmental and economic goals (McCluskey et al pp.4-5). Consumption tax may be levied on goods and services consumed .This system may affects consumers spending behaviors.
6 Pages(1500 words)Essay
National Sales Tax
One flat tax rate along with a rebate tied to the poverty line would replace the progressive system of taxation that businesses and individuals alike have to pay into. There are compelling arguments for and against the NST. The most compelling side is the side against the NST.
10 Pages(2500 words)Essay
Tax Reform
Specifically, governments throughout the world are attempting to preserve incentives built into taxation to maximize economic efficiency. At the same time, these governments are trying to cope with the growth in social welfare programs throughout the past three decades.
6 Pages(1500 words)Essay
The Fair Tax should be Implemented in the United States
(Legislative Branch, 2011, p20190) The essay aims at discussing main points regarding the implementation of fair tax in the United States. NSBA was the first small business organization to give a pass to fair tax to apply to all
7 Pages(1750 words)Essay
Tax reform debate
While the health sector, according to Americare continuously unable to meet the growing demand of patients, due to dwindling financial subsidy from the government. President Barack Obama,
3 Pages(750 words)Essay
To what extent did the 2008 tax reform in Albania affect/ improve its growth and development
Furthermore an analysis of the effect of development based on looking at the figures of unemployment, income distribution, and tax evasion is also done in the paper. Since Albania was previously a closed and centrally
10 Pages(2500 words)Essay
State Tax Reform

The author states that due to the continuing sluggish economic development experienced in North Carolina, investments in education and infrastructure have escalated. In response to the continuously weak economic performance of North Carolina, a significant change to the tax system has been proposed.

6 Pages(1500 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Let us find you another Essay on topic Tax Reform Essay for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • Miscellaneous
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us