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Tax Reform: How to Go About It They manner in which taxes are levied isn’t fair. Those who rely on investments for income pay less tax. This creates a greater gap between rich people and poor people. Corporations, for instance, deduct their charitable donations, auto expenses, insurance and utilities. An individual, on the other side, isn’t allowed to deduct any expenses. Those in the lower income bracket end up paying more taxes. This is inconsiderate as they have expenses such as insurance, medical expense, rent and utilities. The main focus of tax reforms is to get rid of deductions and reduce rates. This doesn’t help individuals in the lower income brackets. Tax systems should have the same rules. Every form of income needs to be taxed. This will ensure that income from investments is treated as normal income. The tax system needs to be fair to allow everyone to use their expenses. Individual returns have to offer the same benefits to every taxpayer. The government should handle all incomes in the same way.
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All taxpayers need to be allowed to subtract their expenses. The deductions include utilities, rent, transportation costs, insurance, tax preparation fees, investment expenses, uniforms, maintenance of personal property as well as charitable donations. Normal taxpayers have to deduct their day-to-day costs from their earnings, just like companies.
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Unemployment compensation is claimed as income. The earnings are taxed as one incurs expenses like health insurance, gas and rent. This is inconsiderate because the person has no job and needs to spend money while seeking a job. 401(k) plans shouldn’t have limits. It’s important to save for retirement. For you to retire comfortably, you need to save some money. To do so, however, may be hard due to tax restrictions. Saving cash can minimize the stress on Medicare as well as Social Security. There shouldn’t be deductions for vacations, private jets and maintenance costs. Also, child support payments shouldn’t be deducted because the one paying the support has paid the tax. The tax system needs to get rid of base and standard deductions. This will address tax returns as well as improve fairness in taxation. Self -employment tax and employee tax should be the same. This way, the tax rates won’t change with the amount of income. One shouldn’t be penalized for owning a business. The tax code benefits people with more money. The tax rates have to correspond to the actual expenses. This will allow every taxpayer to pay taxes and pay for different expenses. Also, individuals will be able to save money and grow their finances. With more savings, you can lead a better life upon retirement. Lawmakers can help in actualizing tax reforms. Basic things should have lower taxes. Luxury things like TVs, yachts and automobiles should have high tax rates. This would increase the tax collected every year.