Monday, August 30, 2010
Tax Reform: These Small Steps Could Help Deficit, Economy
As the Bush administration’s tax cuts near the Dec. 31, 2010 end, the Obama administration looks for ways to keep many of the cuts in place, excluding cuts for individuals making more than $200,000 a year. Throughout history, taxation has faced four major overhauls, all around times of financial crisis (the Civil War, World War I, the Great Depression, and World War II). According to Joseph J. Thorndike, tax reformation tends to occur when the tax code can’t keep-up with demands. Today, the tax code has proven to be insufficient for our economy’s needs. A tax overhaul plan isn’t expected until after mid-term elections and after Obama’s bipartisan deficit commission report on Dec. 1. This plan may prove essential to securing the US’s long-term stability.
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I have read an article talking about the tax cut since 1980s, and it shows that the money from tax the government receives is getting smaller and smaller every year compare to the spending for defense and everything. But it would not be a big deal if the demands from the citizens still the same or less, but those demands keep getting higher, which means that the tax can no longer finance all the activities, which means lower quality in service. For that reason, I think the tax reform will affect the economy a lot.
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