Should the Government Allow Poor People to Pay Less Taxes?

Hello,

Welcome to my portfolio, in this project I am talking about the tax system in the United States.

The reason I chose this topic is that the tax system is a big issue which can have negative effects on the society.

In this project I have done thee things. First, I made avideo which summarizes the idea I support in this topic. Second, I have some vocabularies related to the topic. Third,  I have done two summaries on two articles about the tax system in the United States. Finally, my formal argument where you can get the point I support.

I hope you enjoy this topic. Please feel free to leave any comments.

Thank you…

Abdulrahman

Tax System in The United States

We know that taxes are the main source of income for the government, and we know this income has some benefits, but what if the tax system has a negative effect on the society? What makes the tax system harmful? Many Americans think that the problem is the percentage of taxes that people have to pay, and they argue that poor people should pay less tax than rich people. I think that poor people should pay less taxes because of the following reasons.

One reason that the government should allow poor people to pay less taxes is the tax system can aggravate the poverty. How does that happen? Lets say that the government wants to increase its income to provide people by more services; the fastest way to increase its income is raising the percentage of tax. In this case, poor people will not be able to pay taxes, or their incomes will be affected by this increase if they pay taxes. In other words, if the government only raises the percentage of taxes that rich people must pay, poor people will not be affected, and the government can increase the income without hurting poor people.

Another reason that poor people can pay less taxes is we can have a fair deduction. We know that rich people own most of the businesses in the U.S, and they earn most of the income, but the tax is just a small percentage of their income. In contrast, poor people pay a big part of their income as a tax. According to a 2009 report by the Institute on Taxation and Economic Policy, poor households paid 10.9% of their income as a tax, while the others paid just 5.2% of their incomes. These percentages show us the big gap in the deduction, so the government can have a fair deduction by lowering the percentage of tax that poor people must pay and raise the percentage of tax that rich people have to pay. 

The most important reason why poor people need to pay less taxes than rich people is the goal of tax is providing the population by many services and by the current tax system the government can’t achieve this goal. The current income from tax is not enough to provide the population, so if the government raises the percentage of tax, it will have the same problem. That is because most of the population is poor or middle class, which means the government can’t make a big raise in the percentage of tax, and then it will not have enough income to provide the population. How can the government achieve this goal? The best solution in this case is raising the percentage of tax that rich people must pay. By this way, the government can make a bigger raise because poor people don’t have to pay tax as big as rich people do, and also they will not get hurt by the new deduction. This solution allows the government to generate revenue and then it can provide people by more services. 

Some economists say that the grave problem in the tax system is the percentage that the companies pay and it should be higher, but I think that rich people who are the beneficiary from these companies should pay the higher taxes because they earn most of the profits and they are the first beneficiary of the profits or the income. In addition, if the government raises the percentage of tax that the companies pay, the companies’ executives will find a way to prevent the loss. To solve this problem, the company will increase its prices, and this increase can hurt the local economy or affect people.    
       
       

Tax System in the Unitd States' Vocab

Aggravate: (v) [ag-ruh-veyt]

Definition: to make worse or more severe.

Forms: aggravative (adj).

Example: Rest and avoid activities that aggravate your pain, especially weight bearing activities.

Deduction: (n) [dih-duhk-shuhn]

Definition: the act or process of deducting; subtraction.

Forms: deduct (v).

Example: the tax system is not fair; the deduction is high.

Gap: (n)  [gap]

Definition: an empty space or interval.

Forms: gap (v), gaping (adj).

Example: Eventually the gap between reality and its false interpretation becomes unsustainable, and the bubble bursts.

Profit: (n) [prof-it]

Definition: the ratio of such pecuniary gain to the amount of capital invested.

Forms: profit (v).

Example: After figuring your business income and expenses, you are ready to figure the net profit or net loss from your business.

Executives: (n) [ig-zek-yuh-tiv]

Definition: a person or group of persons having administrative or supervisory authority in an organization.

Forms: Executives (adj).

Example: Mark Allen has been appointed chief executive of unite, the student housing company, effective from the end of 2006.

Tax System in the United State

in the article Poor Americans Pay Double The State, Local Tax Rates Of Top One Percent by Bonnie Kavoussi, the author starts by arguing with Romney  and claims that the government doesn’t have to focus on the 47% of households  who didn’t pay the tax, because 46% are poor people. Then he continues by saying that poor households paid 10.9% of their income as a  tax, and in contrast, the 1% who are rich people paid just 5.2% of their income. Then he continues  by claiming that the local tax system are regressive and that hurts the middle class which is 20% of families. Then he supports his idea by a study which shows that the state income of tax can be effective if the richer people pay more taxes.


In the into of this article Tax the Rich, NO, Taxes for the Poor in the USA, a debate between the republican and the democrats is shown. This debate is about the taxes percent that the poor people or rich people should pay.
then, the writer continues by “ the issue is not taxing the poor and rich people’s wages, the grave problem is the companies get the advantages of the taxes system, which means the companies earn more profits legally. The writer ends by “ the government should change the way of taxation”.

Catalytic Investment Climate

Every country has problems in the economy, so governments always try to find effective solutions that can lead to a better economy. One of the best solutions is creating a catalytic investment climate in the local economy, which can lead to: create more jobs, increase GDP and lower the prices of goods.

Creating a catalytic investment climate means that the government makes the investment in this country effective and attractive. How? The most effective way is lowering the taxes which is the big impediment for the investors. To explain more, investors always prefer low taxes because the taxes reduce their annual profit. If the government lowers the percentage that the investors must pay as a tax, the investors are going to invest in this country and cause the following effects. 

The most important effect of having more investments is creating more jobs in the local economy. Making the investment easier and sacrificing a part of income (taxes) to have more jobs is a current solution in many economies. How can this solution work? The foreign investors, even the local investors will be attracted to invest in this country, so employing a number of the population is a requirement of beginning the project. That means more jobs will be created by the new investments in this country and this is the benefit that every country is looking for.

As a result of increasing the investment in the local economy, the number of GDP will be grown. GDP (Gross Domestic Product) is the standard to know how much the economy is powerful and how much the economy is being developed. Having more investments increases and develops the production in the local economy, which means more products will be made and more bargains will be dealt. For example, the new investment will deal with the current investments or companies because the new investment needs some materials to begin production. Increasing GDP is the target that every country wants to achieve.

The sensible effect of having more investment is lowering the prices of goods. The relationship between price and supply is clear and it means if the supply increases (supply is the number of goods that the sellers want to sell), the price will decrease. The new investing provides the markets with a big number of products. Consequently, the sellers will sell in a lower price because of the big number of products. This consequence is sensible and beneficial for people in this country.

In sum, making the investment easier and paying for that is a value solution that can lead to positive effects. The three important positive effects are creating more jobs, increase GDP and lowering the prices.