Tax Research Paper Example | Topics and Well Written Essays - 500 words - 1

Tax - Research Paper Example Inherently, the Democratic Party openly endorses a tax system that will see the wealthiest, together with corporations pay their fair share of tax. Moreover, they are calling for decisive steps to be made in order to restore fiscal responsibility. Actually, Obama proposes that tax for people earning over $250,000 annually be raised. Essentially, this will affect about 1% of the country’s population, and moreover, this is expected to reduce the deficit with about $ 4.2 trillion in the next decade. In addition, democratic platform follows the framework for corporate tax reform that was introduced by the president (Kapur 5). Actually, the reform advocates for use of closure of corporate tax holes so as to pay for lower tax rates. Notably also, the platform also seeks to undo corporate tax credits together with deductions for the businesses that mainly shift jobs overseas and in the same time lower the rates for the corporations that have invested in the country, especially in res earch and manufacturing. On the other hand, Gleckman, purports that the 2012 republican platform proposes an absolute overhaul of the federal tax system and instead, it calls for a national sales tax or value added tax as the best solution to the country’s budget problems (4). Further, the republicans claim that the move will involve instituting a value added tax, which entails a tax that will confiscate money at different stages of production process. More importantly, Romney also plans to cut taxes by 20 percent, for all as well as do away with alternative minimum tax together with estate tax as well. In addition, his tax plans also speaks of eliminating taxes on investment income for the couples earning an income of below $200,000 (and $100,000 for individuals), as well as maintain the current low tax rates for those with high incomes. The US federal income tax structures base on models of aggregation in expenditure. Application of the Euler equation approach of Hall (978),