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Fixing Taxation in Our Nation

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An old idiom dictates that the only two certainties in life are death and taxes. This phrase, while a bit morbid, is not far from the mark. If these are the only two certainties in life, it makes sense that humanity should work to make the best of them. Centuries of research and study have gone into managing, slowing, and even preventing death, but taxes remain an incredibly vexing part of our society. The government has to collect taxes to continue functioning but that does not mean taxpayers have to suffer, well, maybe not suffer as much. Many proposed fixes for America’s flawed tax system are on the table but not all of them are recipes for success. Before exploring solutions to the tax conundrum in America, one must examine the long history of taxation.


Taxation is one of, if not the, most universal government practice. For the many centuries since humans began to band together into early civilizations governments have been collecting money from their people. This process has been becoming more standardized and mechanized as more societies become organized and communication technology develops. As capitalism began to take root and spread through Western Europe, taxation became a normal, but still disliked part of daily life. When European nations began to spread their fingers across the Atlantic, their economic standards came with them.


Taxes have always been a source of contention in United States politics. Even before it became independent, Americans argued over taxes. “No taxation without representation” was one of the rallying cries of the early revolutionaries in the colonies. After the Revolutionary War, the complaints did not stop. Arguments over the legitimacy of certain tax types or the ideal rate for taxation have constantly swirled through American politics for the last 200 years. Creation of a federal income tax in the early 20th century only further complicated the debate around taxation. Like any contentious issue, taxation often comes to the political forefront.    


Tax reform is a common election promise but little real change usually occurs in the American tax code. In recent memory Republicans, such as the recently elected Donald Trump, have pushed for tax reforms that puts a lesser tax burden on American citizens. The Democrats are not anti-reform, but they tend to favor tax programs that put a heavier burden on the wealthy and more breaks for the poor. The debate has been raging for decades, but little has been done to revolutionize or even fix the current United States tax system. All of this contention begs the question, what would really solve the taxation problem that America is facing?


One popular proposal among Republicans is a flat tax. This means that every American would pay a single, fixed tax rate. For example, a 10% flat tax would require every American citizen to pay 10% of their income to the federal government. This plan is appealing to conservatives because of its simplicity and the fact that it does not seem to disadvantage any individual income bracket. However, a flat tax actually tends to favor the wealthy. In a hypothetical situation of a 10% flat tax someone who makes 60,000 dollars a year is left with 54,000 dollars for everything else. Someone who makes 6,000,0000 dollars is left with 5,400,000 dollars to spend on everything else. It is much easier to live on five million dollars than 50,000 dollars. This disparity seems to be overlooked by many supporters of the flat tax.


Democrats are pushing for a new tax code that puts a greater burden on the wealthy Americans who are bringing in hundreds of thousands of dollars every year. They are also pushing for reducing the tax burden on middle-class families who they see as carrying the majority of the tax burden under the current system. The unfortunate side effect of raising taxes is that it can drive down incentive to keep one’s money in the United States. This can weaken the economy and lead to a lesser base to draw taxes from. In other words, it can be self-defeating.
As is often the case, the best solution seems to lie in the middle of the aisle. The current system seems to have enough problems to make reform seem worth pursuing. The idea of simplicity is a good step forward. The current tax code is bloated and weakened by its own unnecessary complexity. Refining it, even without changing anything major, would do wonders for improving the tax situation in America. Altering the tax burden also makes sense. Wealthier people can afford higher taxes regardless of how loathe they are to pay them. To make up for these tax increases the rates on corporations could be decreased to help incentivize businesses to stay in operation in the United States. Additionally, a lower tax burden on the middle class would inspire more spending, which would further fuel the economy. This kind of compromise could help get the American tax system out of the gutter of political conflict. Such a compromise seems unlikely given the current party polarization in the United States Federal Government. 

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The student news site of Blacksburg High School
Fixing Taxation in Our Nation