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Tax - Essay Example

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Tax is always a national issue that attracts interest and outcry from the investors, government and citizens in equal measures. Tax, a compulsory payment by citizens to the government, facilitates the development of public projects. …
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Tax Introduction Tax is always a national issue that attracts interest and outcry from the investors, government and citizens in equal measures. Tax, a compulsory payment by citizens to the government, facilitates the development of public projects. However, several controversies affect the collection and administration of taxes across the world. This arises of the exorbitant imposed on people based on their income levels and wealth accumulation. Although taxation should be done on an equal level, government departments are considering a reduction for the middle class and an increase for the wealthy.
It is apparent that taxes from the wealthy and income earners help in sustaining the poor though sponsoring public projects. Political policies seek to balance the returns by increasing the rates levied on the rich and a reduction in the middle class. According to an article by Julie Hirscheld, suggests that Obama’s administration proposes a reshape of the tax code to assist the working families (Hirschfeld, n.p). I think this is a noble proposal since it will enable the middle class members to have enough money for saving purposes and job creation. Considering this, the banks will also initiate strategies that shall curb inflation and maximum collection of revenues.
The notable disadvantage of increasing tax for the wealthy is that it will reduce foreign investment prospects. This is because of the fear that the tax authorities will monitor the financial growth of a firm and impose tax depending on the trends. The local investors will also consider taking their wealth to the nearby countries where tax margins are equitable. The other demerit of this proposal is that the government shall be targeting the wealthy at the expense of the middle. This system would also affect the saving programs such as child and education plans supported by the citizens (Hirschfeld, n.p). It is evident that by overcharging the rich will reduce the remittances from the middle class who mostly support the government plans.
It is recommended that, to avoid the above demerits, the changes should not be one-sided. This implies that all taxpayers should feel the same pinch when remitting their deductions. As a result, it will attract investment and hard work to counter the raising economic requirements. I would suggest that the tax alterations should not affect the middle class from proving their child and education saving plans. For instance, flexibility in the spending on child care and education encourages reinvestment in tax credit.
Conclusion
Although taxation should be done on an equal level, government departments are considering a reduction for the middle class and an increase for the wealthy. The changes in tax systems are indicators of economic development of the US and other countries. It is essential to introduce strategies that sustain all taxpayers and encourage savings and investments. The viable thing would be to increase the tax credits of the wealthy, but maintaining those offered by the middle class. By doing so, government saving plans will not be affected and other projects will also get funding from various quarters.
Work Cited
Hirschfeld, Julie, D. “Obama Will Seek to Raise Taxes on Wealthy to Finance Cuts for Middle
Class.” The New York Times. Politics and Economics. Web, 2015. Retrieved from
< http://www.nytimes.com/2015/01/18/us/president-obama-will-seek-to-reduce-taxes-for-middle-class.html>Read More
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