Texas Taxation System
Every individual in Texas was born in equal stipulations of rights that are inalienable such as dignity and freedom but this has not been accomplished through income and the distribution of wealth. Wealth redistribution is, therefore, essential to any nation or government to ensure that every individual acquires equality as they are entitled to a better share (Zhiyong, 19). Texas government is necessitated to aid the poor individuals who are thus unable to access important services due to their wealth and income conditions. In order to achieve this government is therefore required to redistribute wealth and income equally among all individuals. Wealth redistribution is defined as the transfer of physical properties which involves wealthy and income from so e individuals in the society to others by utilization of social mechanisms like welfare, monetary policies, confiscation and land reforms. This process, therefore, involves redistribution of the wide basis of the economy rather than the existing distribution among few individuals (Zhiyong, 21). This, therefore, involves the transfer from the rich to the poor in order to achieve equity and economic progress. Distribution of wealth among several individuals leads to an increase of the poverty level in Texas which thus drags behind the economic, political and social development (Zhiyong, 22). Texas government is therefore required to do more of the redistribution activities to ensure that wealth is fully redistributed from the rich to aid the poor, this will thus help in attaining developments in political, social and economic status.
Policymakers in Texas should design and implement fiscal measures which have greater dependency and reliance on property taxes and wealth which will thus benefit the poor citizens. This should, therefore, involve elimination of tax reliefs which is placed on capital gains, carried interests and stock options which favor the increase of income and wealth equally (Grinberg, 936). These measures are essential because they will permit a growth and improvement cut in labor margins tax income rates in the region. According to the IMF study failure to address wealth and income distribution inequality with proper measures may lead to a repercussion against prompt measures and linearization which would that affects the economy greatly. Therefore in order to prevent the occurrence of the situation the government is necessitated to develop policies to reduce poverty. This is by implementing reforms in different sectors such as education, health, and taxation policies to be made more progressive (Grinberg, 938).
The government may, therefore, accomplish this by reforming taxation system and adopt progressive taxation (Grinberg, 932). The major issue that Texas is facing is in regard to income class and taxation is a threshold. This is in that, the citizens, as well as the policy makers, mutually agree that the middle-class citizens cannot pay higher taxes. Everybody tend to think that they are a middle class which then reduces the amount of tax that is generated. There is a great need to adopt progressive taxation because of the demographic challenges that exist. This challenge reveals that the federal government requires more revenue as time progresses in order to sustain the challenges without deficits that are unsustainable. The progressive taxation system is effective because it aims at ensuring that the higher earns are taxed in large percentage while the low earners are taxed less. This form of taxation is essential because it aims at developing equality by taxing properties such as luxurious cars (Grinberg, 929).
In addition, the government should, therefore, ensure that the higher earning individuals are not highly taxed because this may encourage them to move their assets to foreign nations. This is because most individuals feel that the taxation is too high for them and in order for them to run from taxation they move their wealth and earnings (Burrows, 43). This, therefore, leads to money removal from the government which thus eliminates higher taxation benefits. The government should, therefore, develop favorable monetary measures which will ensure that every individual is fairly accommodated into the system. This allows better wealth spread with richer individuals generating more revenue than the poor ones. This, therefore, eliminates burdens that are placed on those that holds lesser abilities to sustain activities and huge taxes. Monetary measures which are aimed at reducing the disparity of wealth should be implemented (Burrows, 45). This should involve disproportioning upper incomes then redistributing the generated revenue through welfare proceeds. This will, therefore, ensure that social equality is achieved because the welfare activities for the poor individuals will be catered for by the government.
The existing taxation system is regressive. This is because the taxation system involves taking larger taxation percentage from low income earning individuals than from those individuals who earns higher (Formby, Hoseong, and Malone, 98). This form of taxation in Texas is uniformly applied as it hits those individuals that earn low harder than the higher earning ones. This form of taxation is preferred by the government because it is more convenient, it is effective in increasing taxes and it has no evasion cases. This form of taxation is, however, inappropriate in Texas because it is unproductive, unjust and not favorable for the equal growth of the economy (Formby, Hoseong, and Malone, 103).
Regressive taxation is not fair because it does not offer a favorable environment for the development of the economy. This is because those individuals that are not financially stable to pay higher taxes are subjected to higher taxes that those that can afford (Zhiyong, 17). This therefore means that the collected taxes are lower than the taxes that are collected by utilization of progressive taxation. This is because in progressive tax those that ran more pay higher taxes as their income increases while in regressive tax those with lower taxes cannot pay much higher taxes because they are limited.
In addition regressive taxation does not favor the economic growth because it results in higher unemployment rates (Zhiyong, 19). This is because it encourages the poverty level to grow rapidly as most individuals leave their jobs to evade taxes and others transfer their businesses to other counties. The taxation system is thus not favorable for the growth of the economy because fewer finances are left to develop the economy because even the generated revenue fails in meeting the needs of the citizens. This form of taxation also does not favor redistribution of funds which permits the improvement of the good fare of beings. This, therefore, means that individuals have to spend much in education, health, and other social programs as the cost of living are much higher under regressive taxation (Zhiyong, 20). Therefore, there is a great need for the Texas government to implement favorable monetary measures under the progressive taxation which will ensure that economic development is achieved (Grinberg, 932). This will thus be achieved by the redistribution of wealth from the richer citizens to the poor to ensure that the poverty level is decreased.
Work Cited
Burrows, Alan. "School Finance and Tax Reform In Texas." Journal Of State Taxation 33.2 (2015): 41-51. Business Source Complete. Web. 3 May 2016.
Formby, John P., Hoseong Kim, and Keith D. Malone. "How Regressive Are State And Local Taxes?." Journal Of Business, Economics & Finance 2.1 (2013): 90-106. Business Source Complete. Web. 3 May 2016.
Grinberg, Itai. "Implementing A Progressive Consumption Tax: Advantages Of Adopting The VAT Credit-Method System." National Tax Journal 59.4 (2006): 929-954. Business Source Complete. Web. 3 May 2016.
Zhiyong, An. "Regressive State Tax Systems: Facts, Several Possible Explanations, and Empirical Evidence." Proceedings Of The Annual Conference On Taxation (2008): 14- 23. Business Source Complete. Web. 3 May 2016.
