Prewriting Process Analysis
The concept of the fair distribution of the tax burden has always been a core issue among policymakers and the public alike. However, in the past few decades, Americans have grown increasingly dissatisfied with the taxation system. Indeed, a majority of Americans currently view the existing tax system as unfair for a good reason. While the question of whether the USA tax system is fair highly depends on the working definition of “fair,” it is evident in many ways that the USA tax system is inequitable.
Essay Process Analysis
Fairness is one concept that many economists and other financial analysts tend to avoid since it is subjective, a factor that continues to contribute to the deterioration of the American tax system. However, there are three core categories of fairness including, equal justice, commonly referred to as horizontal equity among economists, progressivity known as vertical equity, and individual equity (Diamond & Saez, 2011) . It is essential to acknowledge, over the past two centuries, the definition and perception of tax fairness have changed dramatically. In the past, the taxation system in the US was grounded on what an individual consumed such that tariffs and excise duty were the sources of tax. However, after the Civil War, tax fairness was established based on the ability to pay, leading to the rise and subsequent popularity of the progressive tax system in the USA.
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Prewriting Classification and Division
Currently, the overall tax system in the USA is progressive. However, the continuous system focuses on the redistribution of taxes rather than the dissemination of the burden thereof (Diamond & Saez, 2011) . For this particular reason, the question of whether the current tax laws are effective in addressing income inequity is at the forefront, particularly among individuals and organizations that consider the improper distribution of income as a vice.
Essay Argument
The unfairness of the USA tax system is evident when considering the issue of equal justice. Undeniably, with a tax system larded with one trillion dollars in tax preferences, which aims at rewarding some taxpayers while punishing others, the country is far from implementing a structure that will facilitate equal taxation of individuals that earn relatively similar amounts (Gleckman, 2012) .
Additionally, the bias is evidenced by the uniform perceptions among the majority of Americans, including policymakers, indicating that the tax code should be viewed in isolation (Pew Research Center, 2017) . The requirement to explore the tax system in isolation implies that the current one ignores the people that benefit directly from government spending and the fact that there are tax preferences valued at one trillion dollars.
Furthermore, the amount an individual pays in taxes does not align with what they earn. The American tax system is reliant on other irrelevant factors, including whether an individual’s income has capital interests, encompasses different forms of earnings, number of children, marital status, housing unit ownership, and the prevailing taxation rates in their states, among other such determinants. The result is the establishment of a progressive tax system that employs different criteria in different regions, putting the low and middle-income earners at a disadvantage (Gleckman, 2012) . Unfortunately, the lack of graduated personal income taxes and overreliance on consumption taxes pinpoints to the fundamental unfairness of the American tax system. In most states sales taxes are regressive, with low-income families paying almost eight times what wealthy households contribute in taxes.
Essay Classification and Division
The unfairness of the American tax system is concealed under the structure’s complexity and the fact that it is outdated. Over the past decades, Congress has passed laws and exceptions as incentives to encourage taxpayers to spend money in specific ways. It is unfair for Congress to pass new regulations affecting the tax system to coerce Americans to spend their money in a particular manner. Moreover, the incentives associated with the extra bills, for instance, encouraging certain forms of energy, are concealed by numerous instructions that many individuals do not realize exist. They make the system unnecessarily complicated such that it becomes almost impossible to take advantage of the benefits thereof (Thornton & Hendricks, 2019) . Additionally, the system is outdated and, as such, cannot serve Americans. For instance, payroll taxes that concentrate on the currently trending social security and Medicare cannot meet the future needs of Americans (Thornton & Hendricks, 2019) . A fair system would focus on keeping taxes as low as possible and taking into account the necessity of equitability in raising revenue for government expenditure.
A fair and better tax system would streamline tax incentives for education and pool the personal exemption as well as child and earned income credit into a higher standard deduction. It would be characterized by the single taxing of corporate income rather than the taxation of income and investors’ capital gains (Diamond & Saez, 2011) . Congress should focus on tax enforcement to ensure the American government gets sufficient funds for its operations to avoid cases of taxation inequality.
Conclusion
The question of the fairness or the unfairness of the USA tax system is more of a socio-economic issue rather than it is a financial one. The American tax system continues to take advantage of low-income earners, despite being widely recognized as progressive, because the majority of the taxes are drawn from consumption. Moreover, with more than one trillion dollars tax preference, in many cases, individuals with the same amount of income do not pay the same amount of tax. Additionally, the system is unnecessarily complicated and outdated, all of which are factors that must be explored and amended to enhance the US tax structure.
References
Diamond, P., & Saez, E. (2011). The case of progressive tax: From basic research to policy recommendations. Journal of Economic Perspectives , 165-190.
Gleckman, H. (2012, May 3). Is the USA tax system fair? Retrieved October 19, 2019, from the Tax Policy Center: https://www.taxpolicycenter.org/taxvox/us-tax-system-fair
Pew Research Center. (2017, April 14). Top frustrations with tax system; Sense that corporations, wealthy don't pay a fair share. Retrieved October 19, 2019, from Pew Research Center: https://www.people-press.org/2017/04/14/top-frustrations-with-tax-system-sense-that-corporations-wealthy-dont-pay-fair-share/
Thornton, A., & Hendricks, G. (2019, June 4). Ending special tax treatment for very wealthy. Retrieved October 19, 2019, from Center for American Progress: https://www.americanprogress.org/issues/economy/reports/2019/06/04/470621/ending-special-tax-treatment-wealthy/
