Public policy:
Taxes in Texas
Name
professor
Institution
Date of submission
Tax refers to a financial charge that gets imposed by governmental institutions to enable governmental spending and public expenditure. A regressive tax system refers to the tax imposed on individuals where the rates charged are equal regardless of the consumer’s financial level. This type of tax tends to take a greater low earner percentage as compared to those individuals that earn highly. The total tax does not get altered even if the individual’s income increases[1].
A progressive tax system refers to a tax rate that increases due to the increase in taxable income. It shows that when an individual salary increases, the tax increases thud it is directly opposite if the regressive tax. The tax gets effected to reduce the burden of paying tax by low-income earners.
A flat tax system is a type of income tax imposed on individuals at the same rate regardless of their income level though it gets exempted from people living below poverty levels. This tax system contains a constant marginal level.
Texas, use both the progressive and regressive tax system. The taxable income level for people earning from the first few dollars is exempted while in the sale tax, property that gets sold has got the same tax rate regardless of the income[2]. These property rates get to be uniform; thus, the tax to higher-earning people is low than that of low earning people. In Texas, both the regressive tax system and the progressive tax system gets incorporated in different ways. The regressive tax is incorporated so that individuals are taxed the same while buying property, thus being a burden to low-income earners. In contrast, the progressive tax comes into consideration as low-income people are exempted from tax payment.
Texas deserves a low tax state reputation because it maintains a good business environment as the tax that is spent is less than other states. Also, the number of individuals working is less than in other states. However, Texas has no personal income tax, and governmental and public policies get funded from different sources.
Texas seems to be a friendly state as it has no personal income tax. Most of its tax comes from sales tax, business, and a variety of industries. The state does not entail a property right, but it gets collected by county cities and schools to enhance local use. Texas gets ranked the forty-sixth among other states in providing friendly tax as the tax burden comes at 7.6 percent[3].
Wealth inequality in the United States refers to an unequal asset distribution to residents. It could include home value, personal valuables, business, savings, and investments. Due to inequality trends, the gap between the rich and the poor seems high. There is pervasive inequality in access to services such as health, education, and finance. The united states get ranked twenty-three out of thirty in wealth inequality since it has an unequal income distribution according to the data carried out by the economic cooperation distribution. The inequality seems to have changed from 1920 to 2000[4].
Liberals seem to have agreed that for individuals to be free, there is a need to have property since some people end up having more on the table than others.additionally, it seems fine to all individuals as long as both the low and high earners benefit from the government. Other liberals argue that as long as one has acquired wealth legitimately, its fine for the individual to be wealthy and benefit from it alone. However, over the past years, the gap between the rich and the poor has increased. Most liberals state that if there is a large measure of changes, there will be a reduction in the gap between the poor and the rich. It can get done through tax exemption for those living from hand to mouth[5].
Conservatives think that income inequality seems inevitable. It means that the wealth people have is as a result of the choices they make. It shows that these individuals are less concerned by the gap occurring between the rich and the poor as they tend to dismiss the extend of the widening income gap.
In my view, I believe that the gap created through wealth inequality is inevitable. The rich seem to be on the top north while the poor remain to starve. However, the rich seem to pay a higher tax percentage than the poor due to an increase in tax from the income they earn. I believe that the gap between the poor and the rich threatens democracy. The number of poor individuals tends to gradually[6]. It is because the nation’s resources are under the control of a few people, and this situation tends to threaten democracy in the future.
Bibliography
Carruthers, Celeste, K., and Kara D. Smith. “Are “Education Lotteries” Less Regressive? Evidence from Texas.” Southern Economic Journal 86, no. 3 (2020): 1019-1040. Retrieved from: https://onlinelibrary.wiley.com/doi/abs/10.1002/soej.12413
Chauvin, Juan Pablo, Edward Glaeser, Yuan Ma, and Kristina Tobio. “What is different about urbanization in rich and poor countries? Cities in Brazil, China, India and the United States.” Journal of Urban Economics 98 (2017): 17-49. Retrieved from: https://www.sciencedirect.com/science/article/pii/S0094119016300067
Pfeffer, Fabian T., Robert F. Schoeni, Arthur Kennickell, and Patricia Andreski. “Measuring wealth and wealth inequality: Comparing two US surveys.” Journal of economic and social measurement 41, no. 2 (2016): 103-120. Retrieved from: https://content.iospress.com/articles/journal-of-economic-and-social-measurement/jem421
Saving, Jason L. “Texas Taxes: Who Bears the Burden?” Southwest Economy Q3 (2017): 3-7. Retrieved from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3041184
[1]Carruthers, Celeste K., and Kara D. Smith. “Are “Education Lotteries” Less Regressive? Evidence from Texas.” Southern Economic Journal 86, no. 3 (2020): 1019
[2] Saving, Jason L. “Texas Taxes: Who Bears the Burden?” Southwest Economy Q3 (2017): 3
[3] Saving, Jason L. “Texas Taxes: Who Bears the Burden?” Southwest Economy Q3 (2017): 4
[4] Pfeffer, Fabian T., Robert F. Schoeni, Arthur Kennickell, and Patricia Andreski. “Measuring wealth and wealth inequality: Comparing two US surveys.” Journal of economic and social measurement 41, no. 2 (2016): 103
[5] Pfeffer, Fabian T., Robert F. Schoeni, Arthur Kennickell, and Patricia Andreski. “Measuring wealth and wealth inequality: Comparing two US surveys.” Journal of economic and social measurement 41, no. 2 (2016): 105
[6] increase Chauvin, Juan Pablo, Edward Glaeser, Yuan Ma, and Kristina Tobio. “What is different about urbanization in rich and poor countries? Cities in Brazil, China, India and the United States.” Journal of Urban Economics 98 (2017): 17