What methods can be used to drop or lower corporate taxes and why? HOW CORPORATE TAXES HELP OUR ECONOMY Where did the corporate income tax begin? How does it affect our economy? What is the future of the corporate income tax? Will deleting corporate income tax be the answer for the economy? What about cutting part of this tax? How does the corporate income tax help the economy? These are questions that will be answered in this paper as well as how the corporate tax is affecting our economy now. The Beginning of Corporate Income Tax How the corporate tax began is an example of why tax systems can be worse than they should be and how little influence the economic profession has on government policy (Norton 2)
A multi-state corporation' The chart shows the corporate income tax of various states as a percentage of total revenue from October 2000 to March 2001 versus October 1999 to March 2000. This is ranked from the largest decrease to the largest increase (Vadum 5): North Carolina -3
When it comes to equity, Fleming (2004) is of the opinion that a good tax system should enhance fairness -- meaning that citizens whose capacity to pay is similar ought to be treated equally. In the words of the author, "those with whose capacity to pay is greater should bear a greater burden of taxation" (Fleming, 2004, p
All other income is subject to the various tax rates captured in several bands. In the year 2009 budget, it was announced that beginning April 2010, individuals raking in incomes exceeding £150,000 would be subject to a new 50% tax rate (HM Revenue & Customs, 2014)
" This argument has some credence. According to a debate piece appearing in the Economist, "inequality has risen since the 1970s, as financial liberalization and lower taxes, among other things, have fuelled a rise in the numbers of the very rich" (The Economist, 2009)
It is obvious that the economy is likely to suffer. Ball's proposals have already been met with huge criticism from the business community (Urquhart, 2014)
Generating More Money The restoration of the 50% additional rate of income tax by the UK government is also supported because it would help the government to raise more money. It is estimated that this move would help the Labour Government to generate an extra £10 billion in tax than previously anticipated in the 3-year period when the rate was initially charged (Goodley, 2014)
Some of the counter-arguments raised by these opponents as well as other opponents include the following Potential Disastrous Effect One of the arguments raised by opponents against the restoration of the 50p rate of income tax in the United Kingdom is its potential disastrous effect on the country's economy. Based on findings of some assessments, the restoration of this rate is not a suitable place to start, fund and grow a business, which would in turn become a disaster (Merrick, 2014)
Based on previous attempts to enforce this initiative, the rate has damaged the country's revenues and economic growth. Actually, restoration of this rate has very little to do with reduction of deficit (Nelson, 2014)
The introduction of the 50% additional rate of income tax was primarily part of the coalition Government's fiscal policy toward cutting the deficit. The introduction of the new 50p rate on income tax dominated reactions to the 2009 financial year budget because of its consideration as a significant change in the approach by the Labor Government to tax the wealthy (Seely, 2014)
Some of the arguments raised in favor of the 50% additional rate of income tax include Reducing the Deficit The first argument raised in support of introducing this rate is the need to lessen the huge deficit for the country. Proponents of this move argue that lessening the deficit requires reversing the decision made by the coalition to lessen the rate to 45% (Urquhart, 2014)
This debate or controversy has been characterized with arguments and counter-arguments in favor and against such a move respectively. Recent History of the Additional Rate of Income Tax As previously mentioned, the United Kingdom is ranked among the highest tax countries throughout the globe (Young & Saltiel, 2011)
Their economies of tiny, and based on the value of transactions that such individuals bring to the country. Monaco, for example, requires substantial amounts of money to be deposited into its banks, which allow those banks to lend the money out (Maverick, 2016)