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Tax Reform: How to Go About It

The tax collection system is unfair. Individuals who get their income from investments pay less tax. This creates a greater gap between rich people and poor people. For instance, corporations deduct their insurance, utilities, charitable donations and auto expenses. In contrast, an individual is not permitted 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.

Tax reforms mainly focus on lowering rates and eliminating deductions. This doesn’t help individuals in the lower income brackets. Tax systems need to have similar rules Every form of income needs to be taxed. This way, revenue from investments will be treated just like ordinary 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. These deductions include charitable donations, maintenance of personal property, uniforms, investment expenses, food, tax preparation fees, insurance, transportation costs, rent and utilities. Ordinary taxpayers need to deduct their daily expenses from their salary, just like corporations.
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Unemployment compensation is taken 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 important to save for retirement. You have to save some money so you can retire comfortably. However, it may be difficult to do so because of tax restrictions. Saving money can reduce the pressure set on Medicare and Social Security.

There should be no deductions for private jets, maintenance costs and vacations. In addition, child support payments don’t need deductions because the one making the payments has paid the tax. The tax system needs to get rid of base and standard deductions. This will tackle tax returns and encourage fairness in taxation. Self-employment tax should be the same as employee tax. This will ensure that the amount of income won’t affect the tax rates. One shouldn’t be penalized for owning a business.

The tax code is in favor of individuals with money. The tax rates have to correspond 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. With more savings, you can lead a better life upon retirement.

Legislators can help actualize tax reforms. Basic items shouldn’t have high tax rates. Luxury items such as yachts, vehicles and TVs should be taxed higher. This would add to the tax collected annually.