Taxes
Why does income tax penalize savers but consumption tax would not?
Consumption tax differs from income tax in that it allows taxpayers to deduct any savings they may have from their overall income prior to calculating their taxes (p.644). This type of taxation has become increasingly advocated due to widespread low savings among people in the United States and long-term negative effects this may have on the economy (p.644). With a consumption tax, both savers and non-savers are taxed based on the figures associated with their labor income alone (p.649). However, with the consumption tax, those who have saved money are not required to pay any sort of tax on income earned from accrued interest in their accounts, which is different from requirements with regard to income tax (p.649). This illustrates how savers are penalized with income tax because they are taxed on interest accrued. Overall, the consumption tax has more favorable results for those who save and has greater likelihood of demonstrating no loss in efficiency with regard to the allocation of resources between consumption in the present and that in the future (p.653)
In what sense can spending be regarded as a better index of ability to pay taxes than income?
Consumption may be considered a better index with regard to ability to pay tax based on the premise that by not spending money and instead saving, the tax payer will effectively lower their taxable income since savings are excluded from the tax base (p.644), and the tax is based on labor alone (p.649). Taxation of income, on the other hand, includes savings and investments in the tax base, which results in high efficiency losses that are avoided with consumption-based tax (p.644). Furthermore, consumption taxes have more favorable outcomes with regard to incentives associated with investment and savings in comparison to income tax.
Goal setting works well for simple jobs -- clerks, typists, loggers, and technicians -- but not for complete jobs. Goal setting with jobs in which goals are not easily measured (e.g., teaching, nursing, engineering, accounting) has posed some problems. Goal setting encourages game playing. Setting low goals to look good later is one game played by subordinates who do not want to be caught short. Managers play the game of setting
As Geisel (2004) notes: Income-tax deductions are worth the most to high-bracket taxpayers, who need little incentive to save, whereas the lowest-paid third of workers, whose tax burden consists primarily of the Social Security payroll tax (and who have no income-tax liability), receive no subsidy at all. Federal tax subsidies for retirement saving exceed $120 billion a year, but two thirds of that money benefits the most affluent 20% of
early retirement incentives as a downsizing strategy sUMMARY: This is a thesis that analyzes and studies the use of early retirement incentives as a downsizing strategy by organizations. It has 23 references in APA format. Chapter I- Definition of the Problem Definition of terms-alphabetical order Chapter II- literature Review Health and security Tax deferral Financial targeting Institutional Rationale Employees Impacted Chapter III- Methodology 19-Data collection 19-Data analysis Chapter IV- Data analysis 21-Analysis relevant to research 25-Analysis relevant to research 26-Analysis relevant to research Chapter 5-
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