Federal Income Tax System

Federal Income Tax System

Introduction

United States' citizens pay a number of different taxes; however, of all the taxes that they pay one tax has always been a debatable issue. The income tax is one of the biggest taxes that the United States' citizens pay and has been politically controversial ever since. The federal income tax system was setup with the purpose to fund the United States government (Thornburrow, n.d.). Nobody likes to pay their money earned with hard work to the government. It is provided that as a minimum 40% of Americans pay no such income taxes, the debate arises that is that federal income tax system fair, especially when those taxes do not meet the total of the federal budget. This essay aims to describe the purpose of the federal income tax system and the extent to which this system is fair.

Discussion

The federal, state and at times even city government authorities gather a significant piece of the wealth of nation in terms of taxation. The main objective of this taxation is to invest in government functions but that is barely the only rationale and sometimes not even the most vital. Principally, all taxation is developed to raise income and finance various functions of government. Most state constitutions have no budget deficit conditions, and in all scenarios it is taxation that should meet these yearly costs and expenses (Thomas, n.d.).

Tax profits are an exceptional technique to gather financial and economic information on people and organizations of United States of America. This is not an extensively acknowledged objective for taxation, and the earnings tax was not generated for the key objective of gathering information. However, the way many tax types and the rules for processing them were developed has gathering information specifically in mind (Thomas, n.d.).

Taxation is time and again utilized as an instrument to motivate or prevent certain activities. In the case of income taxation, reductions and exceptions from taxation are utilized to motivate certain actions. The subtraction for house mortgages interest from government income taxation is the best-known exemplar, as it benefits and motivates house possession (Richards, 2009).

Income taxes are progressive in nature, implying that the more earnings you have, the higher is your tax amount. By depending on progressive income taxes, and not other types of taxation, government decreases the comparative tax pressure for deprived, working and middle income people (Thomas, n.d.).

The federal income tax system and ...