Top Ten Things that Could Reform the U.S. Tax SystemAlpha101 It's no secret that most Americans gate our tax system. Some say we are taxed too much, while other people think we aren't taxed enough. Here are some tax systems that could be implimented in the U.S.
The Top Ten
The main proponent of this tax was Henry George. Basically, this tax is similar to property taxes, except the value of your home isn't taxed, the value of your land that your home is resting on is. The reason this tax has so many supporters is that, one, it could lead house prices to drop. Some investors buy large amounts of vacant property and holds it until they can sell it for a profit. If this tax is enacted, it would discourage this type of behavior, and lead to less homelessness and lower housing prices. The amount of revenue this tax could raise, the rate the tax should be, and who should pay the tax are all still being debated. The tax has became so popular that a new political group that supports the tax has risen. They call themselves geolibertarians. Geolibertarians believe that land is given to all of us, and it cannot truly be owned, only rented. Thus, we should all pay rent on the land that we inhabit. This is obviously a very controversial, but a very promising form of ...more - Alpha101
The way this tax would work is very similar to income taxes. The only difference is that everyone would be able to deduct any funds that they used for investment and saving. The money that they used for consumption is the only amount that would be taxed. Many economists believe this form of taxation us more fair than our current system because it does not penalize savings and investment. - Alpha101
Consumption taxes result in less consumption. This can only damage the economy and result in job losses and reduced revenues. This is real-world Economics 101.
But you forget that taxes on investment discourages investment, which also harms the economy. I'd say a slight drop in consumption is worth it if it means more people investing in companies and saving for their future. - Alpha101
You most likely live in a state that collects sales tax. This is the same thing, but it would be administered by the federal government. Supporters state that, depending on the rate, this kind of tax could raise enough revenue to significantly lower or even eliminate most or all income taxes. Thus would make paying taxes much more simple. Others state that the tax is regressive, abd that we should enact a progressive consumption tax instead. - Alpha101
This would be similar to an income tax, but instead of one's income being taxed, their entire wealth is. For instance, Bill Gates makes around 2 billion a year, but he's worth around 80 billion. Normally, he would only pay taxes on his 2 billion, but under a wealth tax, he would pay taxes on his entire 80 billion. Supporters say that this could raise enough revenue to lower taxes for the middle class and will help lower income inequality, while others state that it will discourage investment and is unethical because it mainly targets the rich. - Alpha101
A flat tax is an income tax where all income is taxed at the same rate. Proponents argue that this will encourage investment and will make filing taces much more simple, while opponents state that the poor and middle class will be disproportionately affected and that the federal government would have to make large cuts in order to pay for it. - Alpha101
This tax is aimed at high frequency trading done by Wall Street. The rate would probably be a fraction of a percent. Proponents argue that since Wall Street received a bailout, they should begin to pay the American people back. The also state that the U.S. had a similar system in the past, and the economy boomed. Opponents state that it will discourage investment, and that most countries that have enacted this tax have seen negative effects. - Alpha101
This would be a form of excise tax aimed to help protect the environment. Proponents state that it can raise significant revenue while protecting the environment, while opponents state that this tax could disproportionately affect the poor and middle class. - Alpha101
While some states have this, the federal government does not administer it. It is similar to the estate tax, except that the estate tax is payed by the decreased person's estate while inheritance taxes are payed by the receivers of the deceased's gifts. - Alpha101
Basically, under this system, taxation would be abolished in favor of voluntary donations to the federal government. Proponents say that taxation is theft and that this system would be more fair. Opponents state that huge cuts would have to be put into place in order to pay for this type of system. - Alpha101
Basically, a VAT is cry similar to a National Sales Tax. Proponents state that many European countries have some sort of VAT. and that it will make paying taxes easier. Opponents state that it is regressive and could hurt domestic producers. - Alpha101
Every single person who has income needs to pay at least some tax. Currently, those earning under a certain amount pay zero Federal tax, which is extremely unfair. Even if it's a small percentage, everybody should should pay at least something.
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2. Progressive Consumption Tax
3. National Sales Tax