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4 pages/≈1100 words
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APA
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Business & Marketing
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Essay
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English (U.S.)
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Topic:

Converting to Zero Personal Income Tax

Essay Instructions:

Assignment 1: Should the U.S. Convert to a Zero Personal Income Tax? 
Due Week 7 and worth 280 points
In a recent news article located at http://www(dot)nbcnews(dot)com/business/economy/heres-where-your-federal-income-tax-dollars-go-f654971, NBC News reported that the U.S. Government spends $3.6 trillion per year to fund Social Security, Medicare, homeland defense and safety, education, transportation, and the interest on debt obligations. In spite of the services and benefits that the government provides, many taxpayers dread paying income taxes but consider them a necessary evil. Consequently, there is much debate about the inequities contained within the tax code, due to tax shelters and tax credits provided to some taxpayers which thereby increase the tax burden on others. 
Using the Internet or Strayer Library, research at least two (2) countries that have a zero income tax rate.
Write a four to five (4-5) page paper in which you:
Analyze the way in which the two (2) countries that you have researched provide services and benefits to its citizens without collecting personal income taxes.
For the countries that you have chosen, determine whether or not the U.S. could adopt their taxation model without reducing its total amount of revenue generated by collecting personal income taxes from individuals and business. Justify your response.
Suggest at least three (3) advantages and three (3) disadvantages of the U.S. adopting a zero income tax model. Provide a rationale for your response.
Create a proposal for where the revenue would be derived if the U.S. were to adopt a zero income tax model. In your response, provide specific recommendations concerning the following:
The proposed tax base.
Whether or not tax payers at certain income levels should be exempt from taxation.
The primary way in which the IRS would calculate the tax rate in order to ensure that the same level of tax revenue would still be collected.
The primary way in which your plan will achieve equity.
Speculate on the primary way in which the federal government could make up any shortfalls if it does not collect its targeted revenue from personal income taxes, and ascertain the most significant way in which the U.S. Department of the Treasury, through the IRS, can still adhere to its fiscal and monetary policies. Justify your response.
Use at least four (4) quality academic resources in this assignment. Note: Wikipedia and other Websites do not quality as academic resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
Examine the types of taxes imposed at the federal, state, and local levels; the federal tax formula; and the rules for arriving at personal and dependency exemptions.
Analyze the concepts of gross income and distinguish between the economic, accounting, and tax concepts of gross income and strategies to minimize gross income, maximize deductions, and minimize disallowance of deductions
Use technology and information resources to research issues in federal taxation.
Write clearly and concisely about federal taxation using proper writing mechanics.

Essay Sample Content Preview:

Converting to Zero Personal Income Tax
Institution
Date
Introduction
Economists have long debated the merits that would be incurred if U.S could shift to zero personal income tax. In fact, Keynesian literature has largely indicated disincentives to economic growth that resulted from income taxation. This is because; taxation is only one of the factors affecting work incentive in U.S. This issue makes it extremely challenging to relate available statistical evidence with the responses from interviews by the taxpayers.
There is every reason to believe that zero personal income tax will increase returns for individuals, families, firms as well as to the federal states hence great savings from risks and investments.
Theoretical Review
Despite U.S government spending $3.6 trillion per year to fund social security, education, transport, and Medicare among many other projects, the federal government loses both individual and corporate income revenue from the shifting of profits and income. The revenue losses from the high tax avoidance especially from some of its trading partners are suggested to be around $100 billion per year. The tax avoidance concept has emerged from wealthy individual investors in most of these countries as well as from multinational corporations. Since U.S is not exceptional in the operation of world largest corporations, shift from taxation of personal income to zero taxation means that the country will be in a better position to trade as well as instill alternative of reverting the revenues that would be generated from tax avoidance (Hoffman, 2013) .
It was evidenced that a multinational firm would prefer to constructs factories in a low-tax jurisdiction rather than in the United States in order to take advantages of the low foreign corporate tax rates. If these factories were established in America, they would increase job opportunities as well as increasing the country’s GDP as well as the net per capita income. Moreover, the federal government is aware that most of its citizens participate in economy growth of the foreign countries such as Caribbean, Kuwait and Saudi Arabia by creating secret bank account in their respective banks. This evasion from the federal government from withholding tax on many types of passive incomes paid to foreign entities besides of losing own investors to foreign countries.
Some economists have criticized zero tax income policy, indicating variations in the features used to characterize tax havens. Some of the restrictive definition created by these critics limits tax havens to those countries having zero income tax, to have other traits such as lack of transparency, inadequate information sharing, bank secrecy and requiring little or no economic activity to obtain legal status. However, these allegations are far from the truth (Hoffman, 2013).
Taking an example of Qatar, her government has utilized the zero income concepts to transform the country into the international hub for tourism, fiancé and education. Surprisingly, U.S companies interested in international opportunities would consider current trends and future trends in Qatar than executing and implementing such projects in their own soil. Moreover, the country’s economic growth is stu...
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