https://en.wikipedia.org/wiki/Jobs_and_Growth_Tax_Relief_Reconciliation_Act_of_2

Question

https://en.wikipedia.org/wiki/Jobs_and_Growth_Tax_Relief_Reconciliation_Act_of_2003– Read the Jobs and Growth Tax Relief Reconciliation Act of 2003. a) Do you think that the Bush Tax Cuts helped the economy or hindered progress? b) In addition, do you think Herman Cain’s 999 Tax Plan could be a good alternative economically? Explain your stand. c) Indicate what do YOU think should be the current tax structure for businesses, income and sales in the U.S.as a potential head of the IRS. Do explain the rationale behind your structure.

Explanation / Answer

The bush tax cuts was brought in 2001 to bring down tax brackets ,though not many were affected positively by this economy lost money for deficit financing .People evaded taxes specially the powerfull classes ,many countries availed unnecessary subsidies irrespective of making super normal profits. The 999 plan was an initiative of republican party replacing capital gaing tax and estate taxes. The tax helped in removing favors which was more transparent and efficient .More salary oriented employees benefitted from this system also knows as a flat consumption tax system.A progressive tax could be applied to US economy than a payrol based one , in this way the person is taxed based on his consumption to ensure not everyone has to bear the same cost which increases inefficiency in the tax system. This also causes illegal tax evasions and increases welfare loss for the country.Hence focusing average tax with rise income could be a good practise.

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