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Tax Reform: How to Go About It They manner in which taxes are levied isn’t fair. Individuals who get their income from investments pay less tax. This widens the gap between the poor and the rich. For instance, corporations deduct their insurance, utilities, charitable donations and auto expenses. An individual, on the other side, isn’t allowed to deduct any expenses. Low-income earners ultimately pay more taxes. This is inconsiderate as they have expenses such as insurance, medical expense, rent and utilities. Tax reforms mainly focus on lowering rates and eliminating deductions. This isn’t helpful to those in the lower income category. Tax systems need to have similar rules Every form of income needs to be taxed. This way, revenue from investments will be treated just like ordinary income. The tax system should be equitable to enable everyone utilize their expenses. Individual returns should allow every taxpayer to have the same advantages. The government should handle all incomes in the same way.
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Everyone should be allowed to deduct their expenses. These deductions include charitable donations, maintenance of personal property, uniforms, investment expenses, food, tax preparation fees, insurance, transportation costs, rent and utilities. Just like corporations, normal taxpayers should deduct their everyday costs from their income.
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Unemployment benefits are claimed as income. This income is taxed while one incurs expenses such as rent, health insurance and gas. This isn’t fair because the individual is jobless and must spend cash while looking for a job. They should be no limits on 401(k) plans. It’s important to save for retirement. You should save some cash to retire comfortably. However, tax restrictions may make it hard to do so. Saving money can relieve the stress placed on Social Security and Medicare. There shouldn’t be deductions for vacations, private jets and maintenance costs. Additionally, there shouldn’t be deductions for child support as whoever is paying it is taxed already. Base deductions and standard deductions should be eliminated from the tax system. This will bring about fairness in taxation and take care of tax returns. Self -employment tax and employee tax should be the same. This will ensure that the amount of income won’t affect the tax rates. One shouldn’t be penalized for owning a business. The tax code benefits people with more money. The tax rates should be in line with the actual expenses. This will allow everyone to pay taxes and afford to pay for various expenses. In addition, this will enable individuals to save cash and grow financially. When you have more cash to save, you can have a better life after you retire. Lawmakers can help in actualizing tax reforms. Basic things should have lower taxes. Luxury items such as yachts, vehicles and TVs should be taxed higher. This would increase the tax collected every year.