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.