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The politics of the ideal tax and the federal tax brackets

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The federal tax brackets determine your taxes. When it comes to these aspects specially relating to the government and the money that will come right off your pockets, one can say that too much is not good enough. You might think that this is just a made up thing by someone from the government but you will be surprised to know that there is a well founded basis to determining these amounts, percentages and taxes that they impose to their citizens. Let us identify these measures and tools that the government uses to determine the contents of the tax brackets.

First, there is the Laffer Curve. This was designed for the government to uncover the ideal tax rates that are necessary to fund different projects of the government in order for its citizens, the taxpayers to be satisfied. This is a concept that was said to have been introduced early in the 14th century by a Muslim philosopher and it has carried on till the 21st century. This so-called Laffer Curve has been designed to cover the extremes of taxation. Zero percent taxes means that the government will not have any funds to cover the necessary infrastructure for the common good of its citizens. A tax of 100% may seem perfect but it removes certain freedoms and opportunities for the citizens to enjoy their hard earned money. Do not look at it in a simplistic manner, though. There are numerous complications in determining the right amount of tax per citizen.

First, one aspect that is examined by experts is the Arithmetic effect. According to analysts and experts, this means that the tax rate changes have a couple of effects to the government. One is that it is straightforward and mathematical in approach. It means that if the person pays a certain percentage, then the government will receive this amount. It is made complicated with the so called Economic effect. This means that the revenue from taxes can rise or fall inversely proportional to the changes in the tax rates. This means that when the tax increases, revenue diminishes while lowered taxes increases the revenue.

Based on the Economic effect, if the taxes are too high, businesses are inhibited as they do not grow as much thus, businesses fail and therefore, the revenue in the future could decrease. When the taxes are set lower, this means that businesses can flourish more, and employees are driven to work better since they get more from their hard work while being able to contribute to the goals of the nation. However, it seems very simple to assume that the lower one is the best. Determining the ideal tax rate has been a big political debacle ever since and it will never change. It is a Democrat versus Republican debate all the times, where the question of applying bigger taxes to big economic players is fair or if letting the rich get richer and poor get the scraps is the ideal set up. In the case of the US, the ideal tax will change depending on which political will the dominant group resides. Be it republican or democrat, all we can say is that the tax brackets and other matters are strictly determined by politics, leaving the citizens the task to deal with the situation.