Efficient tax system
Summary
A tax expenditure budget should gear at ensuring that there is efficient and effective articulation of public decision. Governments or the incumbent can only achieve this by quantifying the factors that underlie the division of the tax structure. This the government can achieve by dividing the tax structures between the provisions that stand for the revenue policy and the other component that represent the budget policy. Provisions representing the tax policy (distributing the cost of government based on predetermined legislated tax base) are compared against those representing the budget policy (substitution of the direct spending)
This kind of transparency should have the desired impact, and the government can only ensure this by integrating the tax expenditure budgeting process with the direct expenditure process. At the same time, the incumbent government must formulate precise way in which the government divides the tax expenditure accurately to various components of the tax structures. Early review of some states in the US had shown a very big disparity in the provision and the achievement if an effective distributive structures with thin the system, this was only a demonstration of how an inefficient tax system can really affect the whole tax structure and the overall government spending.
There are also evidences of poor application of the concept and poor connection of the direct budget of expenditure keen on normalizing the system into the preferred elements. Government also need grand consideration in the definition of both the general and fundamental tax structures for them to have an efficient and significant the tax expenditure budget.
Efficiency
While efficiency is the force behind equitable taxation distribution of government revenue, it has gained a lot of interest in the congress circle because of the basic premises under underlying it. However, one of the governments ensures equity in various ways such as efficiency, sufficiency, and simplicity but it does not limit equity to these features. The new policy has a very high efficiency rate compared to the old or current policy. This is because the proposed system eliminates any kind of preferential treatment of other components that the government offers preferential treatment to in the current policy. The government should apply tax code universally in the tax system and should gear at reducing the tax expenditure and not increasing the tax expenditure.
The current policy also fails to incorporate the tax expenditure into the budget. While many tax expenditures are open ended, they should be considered as mandatory expenditures, however, those other tax expenditures that must be limited in terms of appropriation by the policy makers such as the low-income housing credit, have to be incorporated into the government budget with optional spending.
However, it is exciting to note that the state has been operating under a very inefficient tax policy in which the fed just subtract the tax expenditures from the general tax revenues. The current system also does not include the spending total which offers a very big disparity, which involves unchanging the reported spending
While the congress has a duty to level the playing field for the US businesses, they also have a duty to ensure that the system that they are using is efficient. This is particularly true especially if the system is partially restrictive to some parties and offers discretional space to another party. It is also imperative to note that the new tax policy is only efficient if the system does not include or introduce any preferential tax treatment to some parties in the tax code. All business should enjoy considerable right in the way taxation is administered and the way in which the tax system is incorporated onto the government budget. The government is also charge with increasing its tax base, and this can be a very daunting task especially if the congress fails to consider the beauty of having an efficient tax system
It is also quite exciting to note that the taxpayers like the way government spends its revenues but they do not like paying the taxes. Therefore, increasing the spending or preferential treatment of taxpayers and businesses in the state does not offer the best remedy. The best solution is ensuring that the tax system is efficiently caring for all the parties. The taxpayer and the business community will easily prefer not having an increased government spending. This will have an effect in that their tax cut will also increase. The government should therefore consider reducing its expenditure to increase its tax base.
Conclusion
While the tax payment makes the government appear smaller in all respect, it offers more benefits than the current government thinks. It is also important to note that the current system has a very weak tax structure as it fails to consider other fundamental issues like the tax base. This is much more effective because most tax expenditures are less effective than the alternative cash programs. The best way that the government can increase the efficiency of the tax expenditure and increase the tax base is by ensuring that their policy is efficient.
