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Federal Taxation

  • Date Submitted: 12/13/2015 04:46 PM
  • Flesch-Kincaid Score: 62.5 
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Should the USA convert to a zero personal income tax?

Abstract:
This paper will discuss 2 countries that have implemented zero federal income tax and what would happen if the US chose to adopt a similar tax base.



Every year most people in the United States of America gear up to file their yearly personal income taxes. The government relies on this money to operate. About forty five percent of the government income of the United States comes from personal income tax. A lot of Americans wish that they did not have to pay personal income taxes and that the US would adopt a zero income tax policy.   There are many countries that currently have a zero tax model and it works.   This paper will discuss the systems of Qatar and the Cayman Islands and determine if the US could benefit from similar models.
In Qatar the government relies on its income from the natural gas reserves.   It is one of the richest countries in the world. Qatar’s gas reserves are the third largest in the world.   It requires businesses that are in the oil and gas industries to pay a thirty five percent tax rate.   Residents of Qatar pay five percent of their income to social security and their employers pay 10 percent.   Because the U.S. does not have the natural gas reserves like Qatar, it cannot rely on such reserves to provide income for the government.  
The Cayman Islands are another country with a zero personal income tax.   They also do not require residents to pay into social security.   Because of these benefits, many wealthy people use the Cayman Islands as an off shore bank.   The country does put a tax on import duties to generate income and tourism. Employers are required to provide pension plans to their employees as well. The US could use tourism and other outside cost like the Cayman Islands does to generate income.
This begs the question, should the United States of America move to an environment of zero personal income tax?   The United States needs a lot of revenue to run...

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