Rebuilding the United States (eBook)

Douglas Sabbag (Autor)

eBook Download: EPUB

2016 | 1. Auflage
100 Seiten
First Edition Design Publishing (Verlag)
978-1-5069-0114-5 (ISBN)

Infos

Rebuilding the United States is a cohesive, common sense based list of improvements for the United States of America. The ultimate purpose is to improve the health and success of the American Middle Class. By extension, if these goals are realized, the American Dream may once again be enjoyed by the majority of Americans, not just the elite.Some people might suggest that America is doing fine and doesn't need to be rebuilt. But, there are too many statistics, graphics, general information, empirical observations and warning signs, which conflict with that belief. And, if nothing else, I doubt many would argue that there isn't plenty of room for improvement.Please read on to see what I have in mind per our Principles and good old American common sense. We can rebuild our country for our mutual benefit, including the Special Interests, since what is best for us, the average citizens, is best for them too.

Textauszug

Federal Sales Tax Instead of Income Tax

 

In order to fix something it’s important to understand it. So let’s review the history of the U.S. Federal Income Tax System.

 

Article I, Section 8, Clause 1 of the United States Constitution (the "Taxing and Spending Clause"), specifies Congress's power to impose "Taxes, Duties, Imposts and Excises", but Article I, Section 8 requires that, "Duties, Imposts and Excises shall be uniform throughout the United States."

 

In order to help pay for its war effort in the American Civil War, Congress imposed its first personal income tax in 1861. It was part of the Revenue Act of 1861 (3% of all incomes over US $800). This would have resulted in the exemption of many citizens due to lower average income.

However, by 1862, the United States government realized that the war would not end quickly and that the revenue generated by this income tax couldn’t be sufficient. As a result, before any income tax was collected under the first system, the Revenue Act of 1862 was passed in July of 1862. The act was signed into law by President Lincoln on July 1, 1862.

The Revenue Act of 1862 contained three main provisions, with the primary goal of increased revenue. The three provisions were:

 

1. The creation of the office of the Commissioner of Internal Revenue, a department whose duty was to ensure the collection of taxes,

2. The levying of excise taxes on many every day goods and services, and

3. An adjustment to the income tax that was created under the Revenue Act of 1861.

 

The Revenue Act of 1862, section 92, states that: "duties on incomes herein imposed shall be due and payable" in 1863 and each year thereafter until and including 1866 "and no longer."

 

In 1894, Democrats in Congress passed the Wilson-Gorman tariff, which imposed the first peacetime income tax. The rate was 2% on income over $4000, which meant fewer than 10% of households would pay this tax. The purpose of the income tax was to make up for revenue that would be lost by tariff reductions.

In 1895, the United States Supreme Court, in its ruling in Pollock v. Farmers' Loan & Trust Co., found a tax based on receipts from the use of property to be unconstitutional. Due to the political difficulties of taxing individual wages without taxing income from property, a federal income tax was impractical from the time of the Pollock decision until the time of the ratification of the Sixteenth Amendment.

Congress proposed the Sixteenth Amendment (ratified by the requisite number of states in 1913), which states:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

 

Therefore, in 1913, the 16th Amendment to the Constitution made the income tax a permanent fixture in the U.S. tax system. The amendment gave Congress legal authority to tax income and resulted in a revenue law that taxed incomes of both individuals and corporations.

In fiscal year 1918, annual internal revenue collections passed the billion dollar mark, rising to $5.4 billion by 1920. With the advent of World War II, employment increased, as did tax collections, to $7.3 billion. The withholding tax on wages was introduced in 1943 and was instrumental in increasing the number of taxpayers to 60 million and tax collections to $43 billion by 1945. Thus, the US Federal Income Tax was firmly in place and has remained in place.

 

But who’s paying this tax? Mostly, the working citizens of America through withholding a portion of their earned income. From Figure 1, it might be noted that in 2011 there were approximately 136 million taxpayers, i.e., IRS Tax returns filed. However, the total population of the United States is closer to 318 million people. Remember this fact for a later discussion.

Corporations, which are also subject to Income Taxes, are assessed their tax liability per their annual profit, after expenses. Their gross profit is determined by the difference in their official bank account balance from December 31st of the prior year to December 31st of the current tax year, or whichever fiscal calendar they choose. Then their expenses and any other write-offs are subtracted from that amount, leaving their net / reportable profit from which their tax liability is calculated.

 

 

Figure 1 – Summary of Federal Income Tax Data, 2011

 

Then there are various special exemptions, tax subsidies and other unique tax advantages for Corporations which allow greatly reduced tax liabilities even for those with a declared profit.

 

Courtesy of Citizens for Tax Justice

 

Figure 2 – Summary of Five Year Tax Rates for 288 Companies, 2008-2012

 

As seen from Figure 2, 41% or 119 of the 288 companies reviewed for this chart, paid less than a 17.5 % tax rate even though they collectively earned over $900 billion dollars. Worse yet, 9% or 26 of the 288 companies reviewed, paid either zero taxes, or actually received a tax refund while still declaring billions in profits (Figure 3).

Over the 2008-12 period seen in Figure 2, the 288 companies earned more than $2.3 trillion in pretax profits in the United States. Had all of those profits been reported to the IRS and taxed at the statutory 35 percent corporate tax rate, the 288 companies would have paid $816 billion in income taxes over the five years. Instead, the companies as a group were paid hundreds of billions of dollars in tax subsidies.

Tax subsidies for the 288 companies over the five years totaled a staggering $364 billion, including $56 billion in 2008, $70 billion in 2009, $80 billion in 2010, $87 billion in 2011, and $70 billion in 2012.

Almost half of the total tax-subsidy dollars over the five years — $173.7 billion — went to just 25 companies, each with more than $3.7 billion in tax subsidies.

 

Courtesy of Citizens for Tax Justice

 

Figure 3 – 26 Corporations Paying No Total Income Tax in 2008-12

 

Wells Fargo topped the list of corporate tax-subsidy recipients, with nearly $21.6 billion in tax subsidies over the five years. Other top tax subsidy recipients included AT&T ($19.2 billion), IBM ($13.2 billion), General Electric ($12.7 billion), Verizon ($11.1 billion), Exxon Mobil ($8.7 billion), and Boeing ($7.4 billion) (Figure 4).

 

Courtesy of Citizens for Tax Justice; values are in billions

 

Figure 4 - 25 Companies with the Largest TOTAL Tax Subsidies, 2008-12

 

This is an obscene example of the power of lobbyists and money in the Halls of our government. This must end ASAP. Please vote for me – I will do the right thing and review these subsidies, just in case there is some valid logic behind this obscenity, then terminate all Federal Tax Subsidies to Corporations by working with Congress. Then Congress can blame the end of this gravy train on me, to their Corporate constituents.

 

But, enough about that depressing application of influence in our government, let’s return to those who ARE paying taxes. For a broad view of who is paying the majority of the Income Taxes, examine Figure 5.

 

Figure 5 - How the U.S. Government is Funded

 

From Figure 5, Individual and Payroll taxes comprise over 80% of the U.S. tax revenue, while Corporate Tax Revenue is closer to 10% of U.S. Tax Revenue. Therefore, W2 employees who are taxed before receiving their money pay the vast majority of our taxes, while those Corporations who pay any taxes at all, pay the least amount of the total paid.

Not surprisingly, this strikes me as quite unfair, verging on the immoral, and should be illegal. Perhaps you agree. This is an example of the conflict between earned incomes vs. unearned incomes, wherein the earned income is taxed first, and hardest. But, besides the philosophical unfairness of this conflict, this system is also very inefficient.

All year, every year, throughout their entire adult lives, hundreds of millions of Americans, including Corporations, are saving many if not all of their receipts from many if not all of their transactions,...

Produkt-Details

• Erscheint lt. Verlag: 15.2.2016
• Sprache: englisch
• Themenwelt: Recht / Steuern ► EU / Internationales Recht
• Themenwelt: Recht / Steuern ► Öffentliches Recht ► Verfassungsrecht
• Themenwelt: Sozialwissenschaften ► Politik / Verwaltung ► Staat / Verwaltung
• ISBN-10: 1-5069-0114-X / 150690114X
• ISBN-13: 978-1-5069-0114-5 / 9781506901145