The tax collection system is unfair. Those who rely on investments for income pay less tax. This increases the gap between the rich and the poor. Corporations, for example, deduct their auto expenses, charitable donations, utilities and insurance. In contrast, an individual is not permitted to deduct any expenses. Low-income earners ultimately pay more taxes. This isn’t fair because they have expenses like utilities, rent, medical expense and insurance.
Tax reforms are majorly centered on eliminating deductions and lowering rates. This doesn’t benefit low-income earners. Tax systems should have the same rules. Every type of income should be taxed. This way, revenue from investments will be treated just like ordinary income.
The tax system should be equitable to enable everyone utilize their expenses. Individual returns should allow every taxpayer to have the same advantages. The government should handle all incomes in the same way.
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Everyone should be allowed to deduct their expenses. The deductions include utilities, rent, transportation costs, insurance, tax preparation fees, investment expenses, uniforms, maintenance of personal property as well as charitable donations. Just like corporations, normal taxpayers should deduct their everyday costs from their income.
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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 isn’t fair because the individual is jobless and must spend cash while looking for a job.
401(k) plans shouldn’t have limits. It’s essential to save up for retirement. You should save some cash to retire comfortably. However, tax restrictions may make it hard to do so. Saving cash can minimize the stress on Medicare as well as Social Security.
Maintenance costs, private jets and vacations shouldn’t have deductions. In addition, child support payments don’t need deductions because the one making the payments has paid the tax. Base deductions and standard deductions should be eliminated from the tax system. This will tackle tax returns and encourage fairness in taxation. Self-employment tax should be the same as employee tax. This way, the income amount won’t affect the rates of tax. 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. When you have more cash to save, you can have a better life after you retire.
Lawmakers can assist in realizing tax reforms. Basic commodities shouldn’t be taxed high. Luxury items such as yachts, vehicles and TVs should be taxed higher. This would increase the annually collected tax.