They manner in which taxes are levied isn’t fair. People who gain their income from investments pay fewer taxes. This increases the gap between the rich and the poor. Corporations, for instance, deduct their charitable donations, auto expenses, insurance and utilities. On the flip side, it’s not acceptable for an individual to deduct expenses. Low-income earners ultimately pay more taxes. This isn’t fair because they have expenses like utilities, rent, medical expense and insurance.
Tax reforms are majorly centered on eliminating deductions and lowering rates. This doesn’t benefit low-income earners. Rules in tax systems should be the same. Every type of income should be taxed. This way, income from investments will be treated as 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 needs to treat all incomes equally.
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Everyone should be allowed to deduct 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. Ordinary taxpayers need to deduct their daily expenses from their salary, just like corporations.
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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 is unfair considering that the individual has no job and has to spend money trying to look for a job.
401(k) plans shouldn’t have limits. It’s essential to save up for retirement. You have to save some money so you can retire comfortably. To do so, however, may be hard due to tax restrictions. Saving money can relieve the stress placed on Social Security and Medicare.
There should be no deductions for private jets, maintenance costs and vacations. Also, child support payments shouldn’t be deducted because the one paying the support has paid the tax. 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 needs to be similar to employee tax. This will ensure that the amount of income won’t affect the tax rates. One shouldn’t have to suffer for having a business.
The tax code favors those who have more money. The tax rates need to be in proportion to the actual expenses. This will allow every taxpayer to pay taxes and pay for different 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.
Legislators can help actualize tax reforms. Basic things should have lower taxes. Luxury items like automobiles, televisions and yachts should have higher tax rates. This would increase the tax collected every year.