Us Economy Essays (1668 words) - Taxation, , Term Papers

Us Economy Introduction How easy is it for smaller business men to achieve the Aamerican dream. How to stop corporate domination. The question I pose to you is Is the American Dream still achievable? The opportunity is there but for what select few is the opportunity available to. If the resources are out there but I can't tap into the resources they rae of no use to me. (Make note of the fact that we live in a market economy. Body Just about every definition of the market in the dictionary connotes an oppurtunity as a place where goods are bought and sold.(cite dict.) As an abstraction, a market is the possibility of sale. Goods find a market, and we say there is is a market for a service or commodity when there is a demand for it, which means it can and will be sold. Markets are opened to those who want to sell and a convenience for those looking to purchase.(cite 2) The market represents conditions as regards, opportunity for, buying and selling.(cite 2) The market implies offering and choice. The way a market economy works is that there are market pressures that develop for different commodities. The pressures work in one direction for a while, but at the same time pressures are budding that work in the opposite direction. As people look forward and see there's going to be some profit made from their production, they'll make decisions to increase volume, usually hiring more people, buying more materials, often bidding up their prices. When people are competing in the same market, that tends to generate more and more pressure in the direction of expansion. But at the same time, as costs and possibly interest rates rise, pressures begin to operate in the other direction, against profits.(cite 1) The public as a whole must get their fair share of the benefits. Macroeconomic reforms should translate into a more efficient delivery of public services, equity, social welfare and social security.(cite 3) The Economic Policy Institute (EPI) has released its findings on American living standards. The report, issued every other year on a decline that begsn in the late-1970's. The EPI's report also contends that the Americans are working more for less money because of slow growth in wages since 1989. According to the report, wages in the bottom 80% of men have declined since 1989. The report also contends that 20% of women have experienced a decline in trsl esgrd dincr the 1980's, a period in which wages fell but family income increased because of longer hours at work and increased participation of women in the workforce. Critics assert that the report wrongly focuses on declining wages as a gauge to the income of the American family. Such critics find spending a more appropriate means by which to measure income.(cite 4) One proposal would birng back the 10% income deduction for second earners that was eliminated in the Tax Reform Act of 1986.(cite 5) Under that rule, a couple with two earners can deduct from taxable income 10 percent of the earnings of the spouse with the lower earnings(generally, the wife) up to 30,000 of earnings.(cite 5) Since almost all married working women earn less than 30,000, this is equivalent to a 10 percent reduction in the wife's marginal tax rate.(cite 5) To get a sense of how substansial this offset would be, consider a typical middle-class two earner couple. The husband earns 45,000 per year, and the wife earns $15,000 per year by working 1,000 hours at $15 per hour. They pay tax at a marginal income tax rate of 28 percent plus a payroll tax of 7.65 percent.(cite 5) They also pay at a typical state income tax rate of 5 percent.(cite 5) As a result, the wife's $15 per hour wage produces only a net of $8.90 per hour.(cite 5) If she didn't change her work, the deduction would reduce her taxable earnings from $15,000 to $13,500.(cite 5) With a marginal income tac rate of 28 percent, that would cut her tax payments by 420 per year.(cite 5) That's how the current method of revenue estimation would evaluate the revenue effect of the deduction, a $420 revenue loss. But the 10 percent cut in her effective marginal income tax rate (which would result from deducting 10 percent of her earnings from taxable income) would raise her net hourly take-home by a little less than 5 percent, from $8.90 per hour to $9.32 per hour.(cite 5) Statistical studies of the labor supply of