• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Tax laws rules and regulation are not set in stones

Extracts from this document...


Introduction Tax laws rules and regulations change mostly every year and people in the business need to keep up with the fast pace of those changes. Usually, when congress wants to set a rule, they start by issuing it for a limited set of time. The latest try out of congress is section 164 (b) (5), which gives taxpayers who elect to itemized their deductions an option to take their state and local general sales taxes, in lieu of state and local income taxes. As the law is expiring in December 2005, congress needs to decide whether the law should be extended or not. The purpose of this paper is to present an argument against extending section 164 (b) (5). Whose entitle to explore that option? Proponents of extending section 164 (b) (5) contends that this is a benefit for taxpayers because they have an option to take what benefit them the most: state and local general sales tax deduction or take their state and local income tax deduction. We on the other hand, opponents of extending it, believe that even though it looks like a benefit, we should also take into account whether or not taxpayers is going to take advantage of this so called "choice". As pointed out earlier, only people who are taking an itemized deduction could be entitled to choose among state and general sales taxes or state and local income taxes, which means that people who elect to use the standard deduction will not going to be affected by that law. ...read more.


We also have to keep in mind that low-income taxpayers are usually the "everyday-spenders" of necessities such as food and clothing. We can only imagine the burden that they have to undertake if they tried to save all their receipts and calculate themselves their total cost of sales tax expense at year end (Again, what's the use of saving the receipts and calculating the cost if they're not going to itemize anyway?). In addition, the optional sales tax table does not exactly present the best estimation of sales tax expense. Sales taxes usually end up as a lower figure in comparison with the State income tax (unless you made big purchases during the tax year, which you will definitely benefit from it). What about the seven state with no state income taxes? One the strongest argument of the proponents is of the seven states that do not have state and income tax deductions to put in their schedule A. Those states are Alaska, Florida, Washington, Texas, Nevada, Wyoming and South Dakota. Yes, we agree that extending section 164 (b) (5) will benefit the taxpayers in these states because they do not have a state and local income tax to deduct in their schedule A, but we will show later on that extending this law can have a negative impact on the greater number of people. Besides, not extending that law will not make the taxpayers of the seven states financially worse of. ...read more.


As most taxpayers do not keep receipts, they would be eligible to put in their "schedule A" the small amount of money in the table that would probably be less than deduction of state and local income taxes. Thus, most intelligent taxpayers would choose to itemize their state and local income taxes instead of state and local general sales taxes or take the standard deduction if they don't itemized. As a result, extending the law will benefit a small percentage of individual and risking the increase of sales taxes of the majority of taxpayers and people that is not in the workforce. Conclusion We are against the extension of section 164 (b) (5). Most taxpayers will not use it because they will take the standard deduction. The taxpayers that itemize will most likely deduct their state and local income taxes because they may not save all their receipts and the amount in the IRS table will be smaller than state and local income taxes. Furthermore, this law does not help taxpayers it only confuses most people and could even mislead certain people in deducting less than they really entitled to. Extending section 164 (b) (5) could potentially encourage people to spend more than they would usually spend; hence, less money if our savings account. Lastly, it could give the state an opportunity to increase sales taxes of general items as they need extra fund. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Law section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Law essays

  1. The Law Relating to Negotiable Instruments

    payer bank can become liable to its customer for damages proximately caused by its wrongful dishonor of overdrafts. The customer's agreement with the bank includes a general obligation to keep sufficient money on deposit to cover all checks written. The customer is liable to the payee or to the holder

  2. Explain how constitutional conventions differ from laws and discuss, with the use of examples, ...

    courts: "the very name 'convention' is a negation of a right of action at law."6 Although this is the main distinction between laws and conventions, is it clear what enforcement signifies? In accordance with The Longman Dictionary of Contemporary English to enforce is "to make people obey a rule of

  1. Lay People

    If it is Innocent then the defendant has done nothing wrong and is free to go.

  2. What laws did the nazis pass against the jews and what affect did these ...

    Although really they had done nothing wrong. Another law change that had a big affect was that children over 6 had to wear the Star of David on their arm to signify that they were Jewish. The law was made so Germans could tell who was Jewish and who wasn't.

  1. Recognition of States and

    is grounded follow the political and economic arrangements of the social order in which they are found. In stratified societies, law and justice tend to reproduce existing patterns of privilege. In religious societies, i.e., ecclesia, law and justice are given divine sanction...mere mortals cannot argue with either the law itself

  2. Worlds Apart: Orientalism, Antifeminism, and Heresy in Chaucer's Man of Law's Tale

    as woman, and as heretic--and that the lawyer repeatedly performs a reductive rhetorical maneuver in order to induce Christian fraternity among the pilgrims. In locating orientalism at the heart of the Man of Law's treatment of the Muslim, I must take issue with such critics as Morton W.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work