Despite the increased aging population, without increasing the combined amounts of pay-as-you-go taxes and the compulsory savings by 2% of wage income, that is from the current % payroll taxes to a maximum of % and also without any changes in the current or future benefits a transition from pay-as-you-go system to a funded defined contribution system could be achieved as shown by Feldstein Taxation systems are usually modeled in such a way that they take into consideration the social welfare of the citizens. The government and other policy makers have the responsibility of ensuring that the system takes into account the needs of the citizens. The bottom line is that taxation should foster equal distribution of resources Oct 24, · In this regard, the rich are traditionally subjects to criticism from the part of the public because representatives of the middle and lower class stand on the ground that the rich can afford paying more taxes, while the government supported the poor by means of bailout of large corporations and maintenance of taxes for the rich unchanged.4/5(4)
TAXATION - Essay - words
The people who opt for early retirement stop staring contribution to pension system where as they start getting the benefits of pension system. Prieto, The traditional unfunded social security system is facing essay on paying taxes of problems in the United States and other developing countries with the increasing life expectancy of the people.
The cost of providing any level of service is directly linked to the percentage of people who are employed against people who have already retired and enjoying pension in a pay-as-you-go system.
The problem is continuing and increasing with people's move towards early retirement which is encouraged in many countries social security system, essay on paying taxes. Even in the event of retirement being stabilized, essay on paying taxes, the steep increase in the ratio of the aged against that of working age is contributing to the substantial raise in the cost of pay-as-you-go system.
Campbell; Feldstein, In pay-as-you-go system, taxpayers pay high cost to obtain any given benefit which demonstrates the comparative low rate of return the contributors earn on taxes paid by them in an unfunded system.
Only the growth in the base tax rate is the implied rate of return on taxes payers' contribution in an unfunded system as shown in by Paul Samuelson in one of his famous papers. system the tax is based on the cash wages which is the mode of finance and the future total growth in cash wages is the factor which determines the rate of return. In spite of U. social security system being a pay-as-you-go module, where in the every current year, the total tax collection is used for essay on paying taxes benefits of retirees who are already enjoying retirement benefits; there is still an investment in government bonds in the form of a trust fund.
Campbell; Feldstein, The overall rate of return the contributors get on the taxes they contribute and the funds available to pay the annual benefits is affected by the rate of return on the trust fund invested in government bonds.
But since these interests are just a transfer within two government accounts this has no substantial economic contribution, though they can contribute to raise the return on payroll tax payment at the expense of income tax payments. The actual rate of return is determined by the growth and in effect the system effectively operates on a pay-as-you-go basis. Campbell; Feldstein, The pay-as-you-go system costs are increasing and there are three simple ways to control these increase in costs under this system which are reduction in benefits, increase in taxes and pre-funding.
These methods can be used together or individually to control the increasing costs under pay-as-you-go system. Some experts are of the opinion that by cutting the future benefits, the raise in future tax can be controlled. The changes should be to the existing structure of social security benefits with a move towards more fundamental shifts from the existing structure of social security system to a uniform benefit structure such as increase in retirement age and modification to the post retirement inflation adjustment, essay on paying taxes.
Some other experts are of the view to continue with the same benefit by increasing the tax rate significantly in the future. Campbell; Feldstein, However since both these measures of large tax rate increase or major reduction in benefits does not go well with The common feature of pre-funding is that of increase in national saving resulting in increase in national capital stock though the pre-funding proposals have many variations.
Future retirement consumptions are financed by the increased national capital stock resulted from additional national income which makes possible to maintain benefit without raising taxes. However the pre-funding concept was not accepted well by people since long because of the problem of transition generation ending up with paying twice, essay on paying taxes. The transition generation has to pay the pay-as-you-go taxes to finance the benefit of those who have already retired and enjoying retirement benefits but essay on paying taxes the same time saving for their own retirement.
Actually the additional cost on transitional generation is smaller than that of what is highlighted by the critics since with the pay-as-you-go system; the implicit rate of interest is much lesser than the rate of interest on real saving. The actual savings required to finance any future benefits is lesser than the related pay-as-you-go tax rate. The extent of pay-as-you-go benefits can be gradually reduced because of retirees receiving some benefits from the funded part of system during the transition phase, essay on paying taxes.
Campbell; Feldstein, The sum of OASI trust fund receipts i. The interest on the trust fund balance and the revenue transfer to trust fund on the basis of taxing the benefits of high income retirees and the total of OASI portion of the payroll tax is projected to cross the OASI benefits only by under the current law, essay on paying taxes. Beyondpublic borrowings through sale of government bonds held under social security trust fund should temporarily help to continue payment of benefits.
Pay-as-you-go benefits have to be cut or the tax rates have to be raised once the trust fund bonds gets exhausted in Keeping the trust fund always positive in the future without increasing the taxes, with the projected mixture of PRA annuities and the pay-as-you-go benefits for each group of retirees exceeding the pay-as-you-go benefits, that are projected in the current law is one of the main advantage of a mixed system.
Poterba, essay on paying taxes, To make this possible, the pay-as-you-go part of aggregate retirement benefits should be reduced from the extent projected in current law to the extent that can be funded but that are nevertheless high enough for combined benefits to exceed pay-as-you-go benefits projected in current law.
There are many ways that a pay-as-you-go benefits can be reduced to equivalent to the extent projected in current law. Simple methods essay on paying taxes reduce, pay-as-you-go benefits by 0. Poterba, As far as taxes are concerned, there is no need for employees to worry much since most or all of the taxes related to their paycheck is withheld and directly paid to the IRS and state tax department by the employer. The employer does all the relevant calculations and the employee's obligation is just to file the annual essay on paying taxes returns with the IRS and state tax departments.
But when an employees starts his own business, the tax life changes dramatically where there won't be essay on paying taxes employer to calculate, essay on paying taxes, withhold and pay taxes, instead the self-employed have to do on his own, essay on paying taxes.
This requires period tax calculation and filing with the IRS and state tax department which an employee may not be used to while he was an employee and not self-employed. Fishman, To file periodic tax calculation and filing with the IRS and state tax department, one has to maintain records of actual income and expenditure.
Also the process of tax calculation and filing of tax returns gets complicated each year. When one becomes self-employed, the federal government is the one which has the biggest bite in taxes paid by….
References Aronson, Jay Richard; Hilley, essay on paying taxes, John L; Maxwell, James Ackley. Brainard, William C; Perry, George L.
Campbell, John Y; Feldstein, essay on paying taxes, Martin S. Tax Case Study Requirement Tax code section "provides that no gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership, essay on paying taxes.
Tax systems are an important and integral part of any economy around the world. Taxes are imposed by the governments on various activities and it eventually becomes an important source of essay on paying taxes generation for the governments, essay on paying taxes.
Governments use tax revenues in order to finance their public expenditures, essay on paying taxes.
Besides that taxation systems are also a very important essay on paying taxes for the governments in order to influence the aggregate demand and consumer expenditures. Tax Revenues The author of this report is tasked with describing how to compensate and direct the tax collectors of Elbonia to increase tax collections in a way that is essay on paying taxes and compensates the tax collectors commensurate with the work they are performing and the dollars that they are bringing in.
The author of this report will offer a few options that will probably help a lot and a lot of. With regard to the salaried people the federal tax system has improvised a method to flush the surplus spending funds in advance by the mandatory provision of requiring employers to withhold tax from payments in advance which on remitting will be computed as part of the total tax liability of the employee. This method of advance collection is an important feature said to be the pillar of the tax.
tax system of one country with that of another is an exercise fraught with dificulties and ultimately doomed to essay on paying taxes. tax system will never be much more than a reflection of strongly national cultures and forces. Tax Planning -- Employer II of II Tax Planning - Employer The marketplace that businesses operate in has become more and more globalized and international in nature, not to mention extremely competitive.
The prior report focused on the employee. While the implications for the employee, essay on paying taxes. Learning Tools Study Documents Writing Guides About us FAQs Our Blog Citation Generator Flash Card Generator Login SignUp.
Download this Term Paper in word format. Excerpt from Term Paper : The people who opt for early retirement stop staring contribution to pension system where as they start getting the benefits of pension system. Campbell; Feldstein, However since both these measures of large tax rate increase or major reduction in benefits does not go well with.
Read Full Term Paper. Report this Document. Tax Case Study Words: Length: 16 Pages Topic: Business Paper : Tax Systems Are an Important and Integral Words: Length: 6 Pages Topic: Economics Paper : Tax Revenues the Author of This Report Words: Length: 2 Pages Topic: Economics Paper : Tax Law the Nature of Words: Length: 8 Pages Topic: Economics Paper : Tax System of One Country With That Words: Length: 15 Pages Topic: Economics Paper :
How To Pay Yourself (And Taxes) in a Single Member LLC
, time: 9:59Paying Taxes Essay
Taxation systems are usually modeled in such a way that they take into consideration the social welfare of the citizens. The government and other policy makers have the responsibility of ensuring that the system takes into account the needs of the citizens. The bottom line is that taxation should foster equal distribution of resources Oct 24, · In this regard, the rich are traditionally subjects to criticism from the part of the public because representatives of the middle and lower class stand on the ground that the rich can afford paying more taxes, while the government supported the poor by means of bailout of large corporations and maintenance of taxes for the rich unchanged.4/5(4) Essay on Government Taxation. Words7 Pages. There are two things in life that are certain: death and taxes. In today's world, the majority of our government's income comes from taxation. A tax is not a voluntary payment or donation, but an enforced contribution imposed by government (Mikesell, ). Taxes are an amount of money collected from citizens, and they are used to provide public goods and
No comments:
Post a Comment