Identify and explain three criteria for an effective tax system. 

Topic:

Business

2 Answers | Add Yours

mkoren's profile pic

Posted on

There are several criteria for a tax system to be effective. One of the characteristics is the tax system must be fair and equitable: Equity. The tax system should be based on a person’s ability to pay. A progressive tax system may accomplish this. Those who make more money should pay a greater percentage of tax than those who make less money.

Another characteristic of an effective tax system is that is must be relatively easy for people to understand: Simplicity. If the tax code is too complex, and some people feel our tax code fits this description, people won’t support that tax system. The tax system should be simple enough that most people can do their own taxes without needing professional assistance.

Finally, the tax system must accomplish the goals it is supposed to accomplish: Efficiency. If the tax system is supposed to raise money for the government to operate and to pay its bills, then it must do those things. If the tax system is supposed to redistribute income, then that should be accomplished. If the tax system should is supposed to have the wealthiest people pay their fair share, then there shouldn’t be ways for ways for people to avoid paying their fair share.

Taxes are important. The tax system must accomplish what it is supposed to accomplish in order to be effective.

Sources:
readerofbooks's profile pic

Posted on

First, the tax code as it stands is too complex. Even people who are very intelligent have problems filing their taxes. So, one of the best steps for the government to make is to simplify. 

Second, a clear progressive tax code is important. All people should pay taxes, but the wealthier should shoulder more of the burden. However, the limit should not be the limit set by president Obama. Perhaps those over 1 million should be taxed more. 

Third, tax loopholes for corporations should be closed up. Too many corporations benefit from the U.S., but pay little in taxes. 

Finally, the government should watch the super wealthy in America more closely - Swiss bank account, offshore account, and the like. 

We’ve answered 302,002 questions. We can answer yours, too.

Ask a question