Chapter 9 Summary
POSI 3328 Financial Administration
Chapter 9 Summation / Review
DWN
Sunday, April 13, 2014
The objective of the chapter is to delineate and differentiate between the three major taxes in the United States through analyzing their differences, applicability, and issues associated with each. As the chapter begins, Mikesell explains the beginnings of the income tax and how it evolved from an unstable and unenforced law to a steady revenue to aid in the cost of the Civil War. Throughout our early history as a nation, levying a personal income tax proved to be one of the most daunting tasks we would tackle as a united country and enforcing said task, even more difficult. By 1913, at a rate of 1% for allotted incomes, President William Howard Taft was able to levy and enforce a personal income task that would prevail throughout the coming decades. Several figures were given throughout the early 1900’s to detail the changes in income taxes and the marginal differences between personal and corporate filing taxes. Finally for this section, the tax for social security is explained and how it is applied to individuals, employers, and contractors. The book details “The third, and newest, portion of the federal income tax structure consists of the payroll taxes for support of the social insurance system. These narrow- base taxes on wage and salary income and certain income from self- employment may legally be imposed on the employer, imposed on the employee, or shared between the employer and employee; most analysts suspect that the economic incidence is on the employee regardless of who is responsible for sending payment to the government.” In simple terms, employers spreading a tax to the payroll systems in order to provide the social insurance benefit. The next main talking point in the chapter is about equity and dealing with diverse income distribution. The major thesis of this section explains that overall income is the single most identifying attribute of
Chapter 9 Summation / Review
DWN
Sunday, April 13, 2014
The objective of the chapter is to delineate and differentiate between the three major taxes in the United States through analyzing their differences, applicability, and issues associated with each. As the chapter begins, Mikesell explains the beginnings of the income tax and how it evolved from an unstable and unenforced law to a steady revenue to aid in the cost of the Civil War. Throughout our early history as a nation, levying a personal income tax proved to be one of the most daunting tasks we would tackle as a united country and enforcing said task, even more difficult. By 1913, at a rate of 1% for allotted incomes, President William Howard Taft was able to levy and enforce a personal income task that would prevail throughout the coming decades. Several figures were given throughout the early 1900’s to detail the changes in income taxes and the marginal differences between personal and corporate filing taxes. Finally for this section, the tax for social security is explained and how it is applied to individuals, employers, and contractors. The book details “The third, and newest, portion of the federal income tax structure consists of the payroll taxes for support of the social insurance system. These narrow- base taxes on wage and salary income and certain income from self- employment may legally be imposed on the employer, imposed on the employee, or shared between the employer and employee; most analysts suspect that the economic incidence is on the employee regardless of who is responsible for sending payment to the government.” In simple terms, employers spreading a tax to the payroll systems in order to provide the social insurance benefit. The next main talking point in the chapter is about equity and dealing with diverse income distribution. The major thesis of this section explains that overall income is the single most identifying attribute of