The debates on a comprehensive tax reform have taken full gear as togovernment faces to largest tax deficits ever seen in American history.
The bipartisan team set by topresident that is seeking to get an allinclusive solution to this deficit is hard pressed for answers as todeadline for a solution draws neigh. Irrespective of tosolution that is arrived at within these talks, one concern has come out clear -to is in need of comprehensive tax reforms that will address long period government funding while addressing injustices and loopholes available with tocurrent tax code.
Amongst to areas being reviewed for reform is income taxes.
While, who is a former head of Government Accountability Office, about 50 of American citizens do not pay income taxes, that may be a reason for togrowing government deficit. Remember, looking at these tax from this holistic perspective can be misleading. Anyways, intention to better understand of these income tax numbers.
Many businesses do not pay income tax because of toway totax code is set. Businesses and business people will normally pay payroll, excise duty, corporate, and sales taxes. Even if they do not pay income tax per se, they do make their rightful contribution to tonational treasury.
Other groups of people who do not pay taxes on income are since their tax credits and tax deductions will offset toincome tax liability that they are due to pay. They could claim tax credits like toEarned Income Tax Credit, Adoption Credit, Homeowners Credit, energy efficiency credits, and educational credits. By claiming these credits and deductions, they could zero off tootherwise payable taxes and therefore, pay no taxes. These tax incentives are important to promote work or to encourage taxpayers to participate in various economic ventures that are overall, beneficial to tocountry. Most of these credits target tolow income earners and therefore, work towards equitable taxation.
No Income Earners and Special Groups Another group of individuals who do not pay taxes are tounemployed.
It would’ve been unseemly to expect tounemployed to pay any income taxes as they make no income as long as their situation. Basically, other groups of people who do not pay taxes are those who are disabled and have some qualifying tax exemptions.
Elderly Another group of people who do not pay income taxes are toelderly. Senior citizens will in most cases, have their Social Security distribution as tax exempt. Furthermore, whenever exempting a lot of senior citizens, The cap for taxation of this retirement distribution is usually significantly high and therefore. There are a couple of arguments against charging income tax on these retirement funds. Now please pay attention. Whenever taxing Social Security distributions may amount to double taxation, since tobeneficiary already paid cial Security taxes while working. On top of that, many argue that toretired taxpayers might be exempt from paying income taxes, as they have paid taxes throughout their working life and they need toextra money to pay for their health costs among other expenses that they are in need of.
With their delinquent IRS State tax problems, rob L Daniel and partners of Limon Whitaker Morgan, for years have helped businesses and individuals Nationwide.
The firm is based in Los Angeles, California USA. Tel.
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