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How can an income tax system be designed to exploit human nature and a free market to create a poverty free society, while balancing budgets without disproportional tax burdens? Such a tax system, with universal character, is deduced from the following guiding principles: (1) a single tax rate applies to all income types and levels ; (2) the tax rate adjusts to satisfy budget projections ; (3) government transfer only supplements the income of households with self-generated income below the poverty line ; (4) deductions for basic living expenses, itemized investments and capital losses are allowed ; (5) deductions cannot be applied to government transfer. A general framework emerges with three parameters that determine a minimum allowed tax deduction, a maximum allowed itemized deduction, and a maximum deduction defined by income percentage. An income distribution that mimics the United States, and a series of log-normal distributions are considered to quantitatively compare detailed characteristics of this tax system to progressive and flat tax systems. To minimize government dependency while maximizing after-tax income, the effective tax rate (ETR) as a function of income percentile takes the shape of the letter, V, inspiring the name victory tax, where the middle class has the lowest ETR.

It is a standard prediction in the literature on tax competition that mobility of factors between jurisdictions causes local governments to choose too low tax rates and to underprovide public goods. This paper shows circumstances when the prediction may be false. The prediction may be false when workers live in one jurisdiction and commute to work in another. We show that in an urban setting land developers will make inefficient choices of both tax rates and public expenditures. Whether these are too high or too low from a social point of view is ambiguous. The only unambiguous prediction is that the non-cooperative payroll tax is inefficiently low. In our framework, the locational inefficiency is twofold, both residents and workers are inefficiently allocated across communities in equilibrium. We also show that tax harmonisation and/or voluntary inter-community transfers are not effective in restoring efficiency.

Why are tax systems so complex? What are the causes of tax law complexity? What are the consequences? Why is tax simplification so difficult to achieve? These, and related questions, lie at the core of this volume on tax simplification featuring chapters by leading tax experts around the world. The quest for simplicity – or at least some move towards simplification – has been a fixation of governments and others for many years, but little appears to have been achieved. Tax simplification is the most widely quoted but the least widely observed of the usually stated goals of policy (equity and efficiency being the others). It has been used (and abused) as a primary justification for tax reform over the last century, and typically it is seen as "a good thing" – to say that one is in favour of tax simplification is tantamount to stating that one is in favour of good as opposed to evil.The volume explores all aspects of tax complexity and simplification, from policy through law to practice. It is both theoretical and practical, providing key insights that can help the reader to understand tax complexity, assess its impact and identify potential means by which tax simplification can be attained – or at least complexity can be contained.The contributors to the volume cover a range of topics including:• theoretical perspectives explaining tax complexity;• ideological underpinnings of tax complexity;• causes of tax complexity;• ways of measuring tax complexity;• tax compliance costs studies;• institutional monitoring of tax complexity;• implications of complexity for judicial review;• the role of vested interests;• administrative and technological drivers of tax simplification; and• institutional and other pathways towards improved simplification.Contributors include eminent academics, administrators and practitioners with direct knowledge of the adverse consequences of tax complexity and of how simplification initiatives have fared in a variety of countries from around the world.Attempts at tax simplification have – thus far – not been particularly successful. This in-depth study, backed up with facts, evidence and soundly based recommendations of how simplification may be achieved, will be of critical concern for all tax system stakeholders; taxpayers, tax advisers, tax legislators and policy makers, tax administrators and a range of other commentators including academics and journalists.

This report analyzes the amount of individual income tax revenue collected by the federal and state governments and the characteristics of the states' tax policies that determine the magnitude of their revenue collections.

Testimony issued by the General Accounting Office with an abstract that begins "This testimony discusses (1) how payroll taxes fund Social Security and the Medicare Hospital Insurance (HI) programs and (2) noncompliance associated with the Earned Income Tax Credit (EITC) and efforts to deal with that noncompliance. Payroll taxes fund the Social Security Program and the Medicare HI program. These taxes are paid in equal portions by employees and their employers. Employees and their families become eligible to collect these benefits once workers have been employed for a sufficient period of time. Although Social Security benefits are calculated using a formula that considers lifetime earnings, HI benefits are based on the health of the covered individual and are paid directly to the health care provider. Demographic trends indicate that these programs will impose an increasing burden on the federal budget and the overall economy. Regarding EITC, significant compliance problems can expose the Internal Revenue Service (IRS) to billions of dollars in overpayments. EITC noncompliance is identified as taxpayer errors and intent to defraud. IRS and Congress have taken several steps to reduce noncompliance, including the passage of laws that enabled IRS to disallow EITC claims with invalid social security numbers and the implementation of a five-year EITC compliance initiative."

South Africa, like many other countries, is struggling with raising levels of obesity and the resultant health problems. Furthermore, as elsewhere in the world, this country is experiencing an ever-increasing need for additional fiscal revenue. These problems force governments all over the world to investigate possible solutions to these issues. The aim of this study was to determine whether fat tax can be used as a tool to decrease the rising rate of obesity in South Africa and thus improve the general health of South Africans and to create additional tax revenue. Available literature was compared and critically analyzed in terms of South African conditions in order to determine whether fat tax should be considered as an alternative tax in South Africa. Cultural beliefs that see obesity as a sign of good health and prosperity, as well as the extreme poverty experienced by a large proportion of the populace are factors that make it difficult to compare the findings of studies conducted in the rest of the world to those of South African research. These are aspects that should be considered for further research. Fat tax has potential as an alternative tax in order to bring about behavioural change and create revenue; however, this should be done with careful consideration as to whether the benefits outweigh the cost of its implementation for the South African taxpayer.