National Tax

National Tax

Introduction

Collection of tax from its citizens is being viewed as the toughest challenge that a government of the country has to overcome. Country like United States where government tries to provide excellent services to its citizens is facing difficulty in sustaining the collection of annual tax from high-income people (Auerbach, 2002). As according to the survey conducted in year 1989, the national tax saving rate of United States has witnessed considerable decline since 1980.

This decline has raised two severe concerns for the government firstly; it would become difficult for the authorities to maintain the current living standard of the citizens particularly with the speculated increase in the population during the end of this century (Bovenberg, 1989). Secondly, decline in the tax income, is considered the major reason behind the frequent decline in the current account deficit. Thus under current situation, if government aims to sustain the growth of economy, authorities have to increase the income tax revenue on urgent basis.

In order to resolve the prevailing circumstances, Government of President Bust on year 2001 proposed amendment in the national tax structure, and was able to approve it from the congress. Thus on year 2001, Substantial tax act or in other words, (Economic growth and tax relief reconciliation act) was implemented in the legal structure of the country (Engen & Skinner, 1996). However, since its implementation, (EGTRRA) act has become the most debatable topic as according to majority of legal experts, this act would have a negative impact on the overall income of federal budget, and it will further create problem for the authorities.

On the other hand, majority of debates have highlighted the negative aspect of this act, but unfortunately, none of the scholars have focus on the positives of this act (Lewandoski, 2008). This behavior of legal experts and other people is annoying, and at the same time is predictable as majority of them have not even tried to analyze the concepts this act, and further, complexity in the legal structure has further made it impossible for people to accept this act as the part of law (Young & Varner, 2011). However, on positive note individual those are in favor of implementation of this act is that lower amount of tax encourage classified action and in that way would prove to be fruitful for the national economy.

Proper evaluation of (Economic growth and tax relief reconciliation act) explains that benefits of tax incentive are beneficial for the economy, but is a quite stiff task for the authorities to accomplish that challenge. There is of no doubt that this act would positively affect the saving in future, and that would ultimately enhance the production facility of the economy, and living standard of citizens. (Auerbach, 2002) in this research report has primarily focused on the national saving rate of the nation as according to the researcher, national saving rate of the country comprises of total output that is commonly shared by both government and household (Lewandoski, ...