Taxation is a very important aspect to development at both individual and economic levels (United States 34). Taxation as an area of study encompasses both policies and how they will be implemented. It should be noted that taxes are imposed on all legal entities be they individual, state or functional. Furthermore, the taxes are often imposed at different levels and takes on the form of money. The main reason for the payment of tax and the general principles of taxation is to ensure that the citizens play their role in supporting the government or any legislative authority.
The taxes are not paid voluntarily but rather people are forced to pay them and forfeiture is associated with hefty fines and may even led to imprisonment in some cases (United States 56). Funds gained through the taxation system may be used in carrying out the duties that such legislative bodies have been assigned. The government's ability to raise enough taxes is largely reflected on the development of social infrastructure and amenities.
Good healthcare system, education and energy systems are a result proper tax collection systems and usage of the finances collected. Taxation is therefore a matter of concern to all citizens for in one way or the other they will be affected. Even though the public may be in need of good services they are willing to be taxed only up to certain levels. Therefore, it is upon the policy makers to develop tax policies that are fair to the taxpayers and provide enough tax for the overall development of the economy (United States 34).
A nation's tax system is seen to be a reflection of the communal values and the beliefs of those in power. The taxation systems involves considerations on who will pay, how much and how the taxes will be spent (United States 19). The US economy is suffering a major financial crisis, the failure of the financial markets and the increase in governments debts have been the center of most financial discussions. As the polls are drawing ever closer, the political powers and parties have also centered their policies and debates on economic revival of the US.
The democratic presidential hopeful Obama and his republican counterpart have all come up with different ideologies on how they will transform the fate of America and ensure that it returns to its former glory if elected. In either case, taxation systems have come into play as the two have taken on different paths towards what is considered a revival of America (United States 45). One major characteristic of Obama's and McCain's tax policies is that they both aim at reducing government spending.
According to experts this similarities may lead to almost equal deficit though the McCain's systems is likely to be larger. This is because McCain's policies include such drastic measures as stopping governments funding for programs for one year to determine which ones are productive. This is a key difference and may result to a reduction of government debt which is extremely large. Both have pledged to increase the savings made by dealing with the corporate loopholes with regards to tax collection, reducing America's presence in Iraq and either reducing (Obama) or eliminating budget earmarks (Holmes 101).
McCain further vows to reduce the spendings on mandatory services such as Medicare by adopting a policy of slow growth. Even though most are of the view that their policies are unrealistic and far from reach, the analysis will take on the assumption that they are achievable (Holmes 26). America has often considered itself a world power and boasts of well developed social systems. In consideration of the McCain's system, there is possibility that a number of people will lose their jobs if government spendings on programs are frozen (Holmes 79).
The thought of losing a source of livelihood during economic downtimes is not welcomed by anyone and may leads to financial problems at the individual level. Furthermore, if the rate of growth and development of mandatory systems is slowed there is a high risk that the systems may never recover their growth levels if the funds are availed at a later stage since the momentum associated with growth will have been lost. On the other hand, Obama's policies may appear to be fair on the overall development from this perspective however they may appear to have misjudged the financial crisis that the US is in (Holmes 38).
The amount of debts that the governments is currently in requires drastic measures. The spendings by the government have to be cut considerably if there is to be any hope of salvaging the situation. Continuing with operations at levels that are comparatively to the current levels may please the overall public but the objectivity in salvaging America will have been lost unless there are proper mechanisms put in place to ensure objectivity (Holmes 97).
A key difference in their approach to taxation is that Obama will use the savings made in supporting new programs while McCain intends to use the savings to ensure a balance in the budget. According to analysts, McCain's spendings could be lower than Obama's from this perspective for the development of new programs is more resource intensive (Mayer 76). The policies adopted in spending the savings are therefore different in the sense that while Obama intends to use the savings in new programs, McCain will just continue saving until the budget is balanced before he can move on.
The issue of deficit is highly influenced by the policies and the expenditure (Mayer 99). Both candidates are seen to have adopted rather expensive policies, though McCain's is more expensive (Mayer 56). The tax policy center has estimated that Obama's policies would costs the federal government up to $3 trillion in revenue over the next decade, on the other hand McCain's could cost up to $ 4 trillion (Mayer 9). These figures are based on the assumption that the 2001 and 2003 tax cuts will have expired (Mayer 34).
If an assumption is made that the cuts will be extended, Obama's plan is estimated to raise $ 590 billion whereas McCain's will lose $ 2. 9 trillion (Mayer 45). These estimations and statistics do not put into consideration their plans to revamp the healthcare system which will cost $1. 6 trillion as per Obama's plan and $1. 3 trillion as per McCain's plan (Mayer 22). The options that the candidates are left with are quite clear, they either have to raises taxes and cut on government spendings or chose to increase the government debts that is already staggering (Talbott 11).
To chose to either support Obama or McCain on the basis of their tax policies is a big challenge. However, as it always is politics, political leadership is influenced by so many factors and therefore the issue of taxation which may have a great bearing on the lives of many people and the future of America as a nations may not be extremely determinant on whether one chooses to vote for or against a particular candidate (Mayer 34) .
Daily, Frederick. Tax Savvy for Small Business. Berkeley: Nolo. 2007. Einhorn, Robin. American Taxation, American Slavery. Chicago: University of Chicago Press, 2006 Eisen, Peter. Accounting the Easy Way. New York: Barron's Educational Series, 2004. Griffin, Stephen & Walton, Peter. Company law: fundamental principles. New York: Pearson Longman, 2005 Haber, Jeffry. Accounting Demystified.