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Post about United States Taxation on Worldwide Income

Assignment id 1016754
Discipline Writing
Assignment type Essay
Words 1546
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In the last several years, the United States has improved enforcement of non-resident taxation obligation, producing discussion surrounding the U.S. moving towards a territorial version of taxation. A growing number of Americans living overseas are renouncing their citizenship. According to the U.S. Treasury, 1,781 Americans gave citizenship up in 2011. Contrast that with 742 at 2009 and 278 in 2006 (McKinnon 2012). Businesses also bear the weight. In 2008, 12 percent of all federal revenues came from business income taxation, of which approximately half was compensated by multinational corporations reporting foreign income (CBO). Thus, many businesses are following suit, using tax avoidance schemes to decrease the range of their U.S. tax burden or simply moving to different tax jurisdictions. The United States is one of only two nations in the world that taxes its citizens on their worldwide income, with no respect to physical home. During the remaining part of the world, taxes are levied on individuals based on their residency, not citizenship (McKinnon 2012). This type of statement brings the query concerning why the United States is such an outlier in this regard? This paper will serve as an argument of the roots of the United States’ method of worldwide taxation, the tax system’s present state and implications on U.S. corporations, and recent proposals to amend the machine. The United States’ method of global taxation frees its roots out of federal conflict. The very first national person income tax, enacted in with the Revenue Act of 1861, collaborated with the outbreak of the Civil War and sought to help the financing of warfare costs (Terrell). The Act levied a three % tax on income around $800. However, a 5 percent tax has been levied on income made by any citizen living abroa...

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