Zero Personal Income Tax Essay Example

qualify for a second home grant in the Bahamas, individuals must pay an annual fee and acquire land. The processing time for necessary documents varies based on the value of the property. Although healthcare in the Bahamas may not be financially feasible, Nassau is notorious for its high crime rate. Nevertheless, by selecting expat-friendly neighborhoods and seeking medical treatment abroad, particularly in the US, it is achievable to experience a lavish lifestyle in the Bahamas (Irwin et al, 2016). Policymakers concur that reforms are imperative for the US tax system.

America's present tax code does not conform to the current circumstances, though it may not be in the manner some politicians would have voters believe. The use of anti-tax slogans and impractical plans to substitute the existing tax system serve as a diversion from confronting the truth that the United States is currently encountering: swift income growth for top earners and an aging population. These factors combined will increasingly pose challenges for both the U.S. economy and government budget going forward.

Inspired by the Bahamas and United Arab Emirates, the US should prioritize the adoption of a zero personal income tax policy. Currently, personal income tax burdens job seekers, particularly those in middle-class and low-level households, leading to an increasing wealth gap between the rich and poor. To address this issue, our country should declare itself as a free zero personal income tax nation. Additionally, we must explore alternative avenues for job creators to contribute significantly to the tax system while simultaneously implementing measures that close any loopholes allowing for tax evasion (Stiglitz et al, 2015).

There has been much discussion about adopting a Flat or Zero

Tax Rate for the US Tax Structure. It is worth considering the advantages and disadvantages of adopting the Zero Tax Rate. Adopting this structure would greatly reduce the minor and effective tax rate for most US Taxpayers and eliminate double taxation. On the other hand, adopting a Flat Tax Rate structure would simplify the tax planning process, saving US Taxpayers billions of dollars in tax preparation fees. Both corporations and individuals would be able to file their returns on a streamlined form.

The adoption of a Zero Tax Rate structure is beneficial for investment funds, as it encourages more capital allocation and stimulates the economy (Burkhauser et al, 2015). To further simplify tax procedures, a Tax Simplification Bill could allow businesses to include all their capital investments without dealing with complicated depreciation regulations. By deducting all operating expenses, this measure would boost domestic investment and foster economic growth in the United States, leading to greater job creation and employment opportunities.

The individual income tax is a dynamic duty with a level rate of assessable pay. However, saving or investing can decrease an individual's assessable income and their total tax payment. If the government establishes zero individual income tax, they can rely on corporate income tax as another revenue source due to our country's industrialization. Companies are currently financing a smaller share compared to what they used to contribute through individual income tax for general government operations. In the fiscal year 2015, the government collected $343.8 billion from corporate income taxes, accounting for 10.6% of its total revenue (Stiglitz et al, 2015). Prioritizing addressing these loopholes would provide this additional source of revenue.

Receiving the Zero Tax Structure would

mean "eliminating most of the Schedule, deductions such as mortgage interest payments and property tax, a significant inconvenience for homeowners." This could potentially lead to further declines in home prices. A major incentive for owning a house was the attractive tax deduction for deducting the mortgage and interest payments. Adopting the Flat Tax Structure would involve getting rid of half of the Schedule, including deductions such as charitable contributions, employee business expenses, and loss losses. Embracing the Zero Tax Structure would mean that some taxpayers would never have to pay taxes, thus reducing overall tax revenues.

The implementation of the Zero Tax Structure would lead to a decrease in taxes for wealthy individuals, which could potentially create a Regressive Tax system. If this approach proves insufficient, the government has the option to seek assistance from external sources such as Eurobond or borrowing from the IMF. These measures would significantly contribute to the long-term development and improvement of middle-class Americans.

References

• Stiglitz, J. E., & Rosengard, J. K. (2015). Economics of the Public Sector: Fourth International Student Edition. WW Norton & Company.
• Burkhauser, R. V., Hahn, M. H., & Wilkins, R. (2015). Measuring top incomes using tax record data: A cautionary tale from Australia. The Journal of Economic Inequality, 13(2), 181-205.
• Irwin, R.

J., ; Irwin, T. C. (2016). Stability of an exponential distribution for New Zealand taxable personal income. New Zealand Economic Papers, 1-11.