Wealth Tax Act

Examples of Wealth Tax Act in the following topics:

• Social Security and Tax Reform

  • Roosevelt pushed for a number of tax programs that would impose high income taxes on the wealthiest Americans.
  • The most important program of 1935, and perhaps the New Deal as a whole, was the Social Security Act, drafted by Francis Perkins.
  • Compared with the social security systems in western European countries, the Social Security Act of 1935 was rather conservative.
  • In 1935, Roosevelt called for a tax program called the Wealth Tax Act (Revenue Act of 1935) to redistribute wealth.
  • The Undistributed Profits tax was enacted in 1936.

• The Second New Deal

  • The National Labor Relations Act revived and strengthened the protections of collective bargaining in the original National Industrial Recovery Act (NIRA).
  • In 1935, Roosevelt called for the Wealth Tax Act (Revenue Act of 1935) to redistribute wealth.
  • The bill imposed an income tax of 79% on incomes over $5 million.
  • The Undistributed Profits tax was enacted in 1936.
  • Paid dividends were tax deductible by corporations.

• Toward a Welfare State

  • Perhaps the most important and influential program of the New Deal was the 1935 Social Security Act (SSA).
  • In 1935, Roosevelt called for a tax program called the Wealth Tax Act (Revenue Act of 1935) to redistribute wealth.
  • This highest tax rate covered just one individual, John D.
  • In 1936, Roosevelt also pushed for a tax on undistributed corporate profits.  
  • Paid dividends were tax deductible by corporations.

• Comparing Marginal and Average Tax Rates

  • An average tax rate is the ratio of the total amount of taxes paid, T, to the total tax base, P, (taxable income or spending), expressed as a percentage.
  • Broadly, the marginal tax rate equals the change in taxes, divided by the change in tax base, expressed as a percentage.
  • A progressive tax is a tax in which the tax rate increases as the taxable base amount increases .
  • A regressive tax is a tax imposed in such a manner that the average tax rate decreases as the amount subject to taxation increases .
  • In terms of individual income and wealth, a regressive tax imposes a greater burden (relative to resources) on the poor than on the rich — there is an inverse relationship between the tax rate and the taxpayer's ability to pay as measured by assets, consumption, or income.

• Distribution of Wealth and Income

  • The distribution of wealth and income reveals inequalities among and within countries and the ways in which wealth is redistributed.
  • Conservative economic policy may provide tax cuts to wealthy business owners in attempt to increase their profits, on the basis that doing so will improve the country's overall economy.
  • The distribution of wealth is a comparison of the wealth of various members or groups in a society.
  • One commonly used method is to compare the wealth of the richest ten percent with the wealth of the poorest ten percent.
  • One form of wealth is land or real estate.

• Financing the US Government

  • For example, income taxes due to their progressive nature are used to equitably derive revenue by differentiating tax rates by income strata.
  • The income derived in this manner is then used to transfer income to lower income groups, thereby, reducing inequalities related to income and wealth.
  • Excise tax: tax levied on production for sale, or sale, of a certain good.
  • Sales tax: tax on business transactions, especially the sale of goods and services.
  • Capital gains tax: tax on increases in the value of owned assets.

• British Taxes and Colonial Grievances

  • The Sugar Act of 1764 reduced the taxes imposed by the Molasses Act, but at the same time strengthened the collection of the tax.
  • Prior to the Stamp Act, Parliament imposed only external taxes on imports.
  • The Stamp Act provided the first internal tax on the colonists, requiring that a tax stamp be applied to books, newspapers, pamphlets, legal documents, playing cards, and dice.
  • The Townshend Acts, passed in 1767, taxed imports of tea, glass, paint, lead, and even paper.
  • In 1773, Parliament passed the Tea Act, which exempted the British East India Company from the Townshend taxes.

• Tax Protests

  • A series of taxing legislation during the colonial era set off a series of actions between colonists and Great Britain.
  • Tax loads in practice were very light, and far lower than in England.
  • The first wave of protests attacked the Stamp Act of 1765, and marked the first time Americans from each of the thirteen colonies met together and planned a common front against illegal taxes.
  • The Parliament attempted a series of taxes and punishments which met more and more resistance, namely the First Quartering Act (1765), the Declaratory Act (1766), the Townshend Revenue Act (1767), and the Tea Act (1773).
  • In response to the Boston Tea Party Parliament passed the Intolerable Acts: the Second Quartering Act (1774), the Quebec Act (1774), the Massachusetts Government Act (1774), the Administration of Justice Act (1774), the Boston Port Act (1774), and the Prohibitory Act (1775).

• Federal Income Tax Rates

  • When the tax is levied on the income of companies, it is often called a corporate tax, corporate income tax or profit tax.
  • Individual income taxes often tax the total income of the individual, while corporate income taxes often tax net income.
  • In order to help pay for the American Civil War, the federal government imposed its first personal income tax on August 5, 1861 as part of the Revenue Act of 1861.
  • This tax was repealed and replaced by another income tax in 1862.
  • Advance payments of tax are required in the form of withholding tax or estimated tax payments.

• Tax Accounting

  • Tax accounting couples legal obligations with financial accounting to ensure adherence to current tax laws.
  • Tax accountants act as the bridge between an organization's accounting team and the reporting bodies in the region.
  • On the strategic side of this, tax accountants can consider any tax implications as it pertains to certain strategic decisions or tactics.
  • More tangibly, tax accounts will focus on the preparation, analysis, and presentation of tax payments and tax returns at all times.
  • Non-profits have unique tax preparation requirements due to their no-tax status.