Organizational Tax Research and Planning - Tax Reform Paper

Organizational Tax and Planning - Tax Reform - Research Paper Example This proposal can be implemented by providing qualified employers with wage increases accompanied by a tax credit (Committee on Ways and Means, 2013). The tax credit should be equal to 10% of the increase in the employer’s wage increase. The maximum amount of the increase could be set at five million dollars per employer. On the other hand, the maximum credit should be $500,000 in order to focus on the benefits accruing to the small businesses. Indeed this proposal is the most viable. This rationale can be explained by the fact that a tax credit would reduce labor costs in the economy thus, encouraging firms to hire more workers (Jurinski, 2000). Employees will also benefit since, they will secure job opportunities in the economy. A tax credit would be more beneficial compared to a flat subsidy because, the temporary tax credit for all firms would lead to sharing of the credits and providing an incentive that would lead to an increase in employment and wages that previously, w ould have been increased without an incentive. An incremental tax credit will also have an effect of rewarding corporate businesses by expanding industries and regions in the country while at the same time helping those firms and industries that might be still experiencing economic stagnation. Therefore, indeed corporate taxpayers have huge benefits to reap from this policy. Businesses experiencing labor shortages due to the recession will also benefit from the increase in the employment (Jurinski, 2000).... ecause, the temporary tax credit for all firms would lead to sharing of the credits and providing an incentive that would lead to an increase in employment and wages that previously, would have been increased without an incentive. An incremental tax credit will also have an effect of rewarding corporate businesses by expanding industries and regions in the country while at the same time helping those firms and industries that might be still experiencing economic stagnation. Therefore, indeed corporate taxpayers have huge benefits to reap from this policy. Businesses experiencing labor shortages due to the recession will also benefit from the increase in the employment (Jurinski, 2000). With the tax relief, businesses will also increase their profitability level since; they will have increased their productivity. The key impact of repatriating foreign profits earned without incurring a federal tax liability is reduction of a tax expense on corporations (Urban-Brookings Tax Policy Cent er, 2013). Corporations will have a lower trading expense when given a tax credit on the federal tax. In addition, many trading corporations will also be attracted to engage in foreign trade. This is because; most businesses normally shy away from foreign trade due to the high federal taxes. Therefore, they prefer trading in the local market in order to avoid incurring these tax expenses. Reduction of the federal tax liability will also have positive implications on the US economy (Jurinski, 2000). This is because there will be many businesses engaged in foreign trade and thus, there will be an increase in foreign income generated to the country. The demand for goods and services produced in the country will also increase since; corporations will be serving both the local and foreign

Reforms in India after 1991 have generated rapid rates of growth but Essay

Reforms in India after 1991 have generated rapid rates of growth but risk leading to increasing leves of inequality - Essay Example At the same time, the country increased its reliance on the market and restructured the role of government to achieve economic stability (Dreze & Amartya, 1995). India witnessed a change for the better in her economic performance after implementation of policy reforms in 1991. An average growth rate of 0.6 percent was experienced in the decade of 1992-93 to 2001-02, putting the country among the fastest growing, developing nations in the 1990’s. Though, this growth figure was only slightly higher than the average of 5.7 percent in the 1980’s, but it was more stable. Growth in the 80’s was characterized by a built up of external debt which eventually resulted in the crisis of 1991. In comparison, growth in the 1990’s was accompanied by notable external stability; in spite of the economic crisis is East Asia (Dreze & Amartya, 1995). The continued economic growth in India of over 7 percent per annum, despite high international oil prices and consecutive coalition governments, both at the provincial and federal level, has built confidence in the previous attitude towards the reforms. With the exception of a few issues regarding privatization of public enterprises, the reforms are generally appreciated across different political parties of the country. There are however strong apprehensions over the possible influence of the apparent reforms-driven economic growth on the prevalence of poverty (Datt & Ravallion, 1997). There have been arguments that the economic growth observed immediately after the 1991-92 reforms had not played a part in reducing poverty. According to the arguments presented by Datt and Ravallion (1997), while a sharp increase in poverty was witness as the result of the 1991 crisis, the reforms caused poverty to fall back to the pre-1991 levels, thus contradicting the assumption that the reforms brought an organized change in the country’s poverty plane. This argument