Income tax is a regime duty obligatory on persons or entities that fluctuate with returns or profits of the taxpayer. Excise rate rises with the increase in ratable returns, on a graduated scale.
In recent years, a range of legislators have questioned the perception of exempting low income families from paying income taxes; in contrary, exempting the poor from paying income taxes is a creditable goal for a number of reasons to the economy. Foremost, taxing the poor families drives them deeper into poverty. Taxing the poor also makes it tough for them to toil to their way to self-sufficiency. In addition, exempting the poor from paying income taxes can help struggling families throughout economic tough times; that is, the poor is not a fixed group, many families move out of poverty with time (Gitterman and Howard 22).
The government can recover lost income through highly taxing the wealthy families to bridge the gap between the rich and poor. In addition, there are inevitable taxes such as federal payroll taxes, excise taxes on gasoline, aviation, cigarettes, and alcohol.
In business, a reduction in the corporation tax rate has serious repercussions such as reducing the cost of capital for firms, and it affects the economy through other channels like higher wages and employment. Finally, tax reduction boosts productivity and thus GDP growth (Bank 7).
In conclusion, the rich bear the wrath of paying more taxes to make up for the tax reduced. In contrary, this does not substantially make up for the tax reduced since the poor have the greatest population. It is also very unfair to punish people for their hard work and this encourages laziness.
Bank, Steven. From sword to shield: the transformation of the corporate income tax, 1861 to present. Oxford: Oxford University Press, 2010. Print.
Gitterman, Daniel Paul, and Christopher Howard. Tax credits for working families: The new American social policy. Washington, D.C.: Center on Urban and Metropolitan Policy, the Brookings Institution, 2003. Print.