Direct Vs. Indirect Taxation Term Paper

A look at the differences between direct and indirect taxation.
# 150446 | 1,885 words | 8 sources | MLA | 2012 | PK
Published on Feb 17, 2012 in Accounting (Tax) , Political Science (Government Agencies)


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Description:

This paper examines the arguments and dilemmas of direct versus indirect taxation in order to promote a sound economy. First, the paper explains the difference of direct and indirect taxation, pointing out that direct taxes are levied on one's income whereas indirect taxes are paid on the purchase of goods and services. The paper uses federal income tax and federal sales tax as examples of both. Next, the paper discusses what would be the best system of taxation for the US government to follow. It also points out short-comings in both approaches. According to the paper, it would be best to run these systems side by side. The paper concludes by stating that the best option for the government to streamline its operations is by implementing a system that is not only fair, but also leads to less implementation and supervision charges so that money reaches the people who deserve it.

From the Paper:

"We can use the above definitions to classify the federal income tax and federal sales tax into one of the two classes of taxation. This would help us in determining which is more useful in terms of revenue for the government and welfare of the society. Since we know that federal income tax is levied on people's income and is calculated annually, we can classify it as a direct tax. This means that it is levied on the person's income. It is a progressive tax where the rich person pays a higher amount than a person who is earning lesser than that person. On the other hand, federal sales tax is levied on the purchase of goods and services. People pay this type of tax only when they buy or sell something. It is not charged on the person's income and it is a regressive tax meaning that both rich and poor pay equal amount of tax if the selling price of a good is same for their purchases."

Sample of Sources Used:

  • Bamford, C. Economics. Oxford University Press, 2003. Print
  • Hotelling L. The General Problems in Relation to Taxation. JSTOR, 2003. Web
  • McConnell and Brue, S. Economics. Prentice, 2003. Print
  • Metcalf, G.E. VAT: A Tax Whose Time has Come. JSTOR, 1995. Web
  • Mifflin, H. Fast Food Nation. New York Time, 2005. Web

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APA Format

Direct Vs. Indirect Taxation (2012, February 17) Retrieved February 05, 2023, from https://www.academon.com/term-paper/direct-vs-indirect-taxation-150446/

MLA Format

"Direct Vs. Indirect Taxation" 17 February 2012. Web. 05 February. 2023. <https://www.academon.com/term-paper/direct-vs-indirect-taxation-150446/>

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