Executive Summary
There are many features of the U.K. system which differ significantly from that of the U.S. One difference between the two tax structures is the U.S. does not receive revenue from value-added taxes and the U.K. does not receive revenue from sales taxes. Another difference is the tax base of the U.S. is more than 10% smaller than the U.K. Both countries are similar in allowing personal standard deductions for each dependent. Another similarity is both tax systems’ personal income tax is the greatest source of revenue for the federal and central government. The tax systems are also similar in tax rates because both have a progressive tax rate structure. The U.S. and U.K. offer personal tax exemptions for qualifying dependents. …show more content…
and U.K. are similar in tax rates because both have a progressive tax rate structure. Both structures have tax rates which are utilized in calculating the tax liability. The progressive tax is created when the personal exemptions and standard deductions are taken into account. The U.S. has an effective tax rate and a marginal tax rate. The effective tax rate is the total tax liability percentage of total income. The marginal tax rate is the tax applied to the next dollar of income that is earned, given the current income. For the 2015 U. S. tax year, single taxpayers and married taxpayers with an adjusted gross income of $413,200 and $464,850, respectively, will have a marginal tax rate of 39.6%. The U.K., it is much lower ate 23%. Similarly, the U.K. has an effective tax rate, as well as, a marginal tax rate. The effective tax is applied to incomes above the personal allowance from zero to £100,000 and the marginal tax rate is applicable to incomes above …show more content…
The U.K. tax system focus is on becoming smaller and more efficient in updating the organization and services it provides to customers. They will invest in measures to reduce tax evasion and avoidance and narrow the tax gap. By 2015, the system will reduce its costs by 25% and reinvest about £1 billion of the savings in measures to bring additional revenue. The system will seek to improve digital services, simplify processes, provide additional assistance during bereavement and retirement, improve skills of current staff, and consult with tax agents for new approaches to client transactions. The U.S. focus is on the long-term problem of combatting offshore tax evasion. International tax evasion is top priority and people hiding assets offshore could find themselves at risk of enforcement action. The U.S. will work to identify offshore account owners, as well as banks and other promoters of willful evasion of the law. In 2009, the Offshore Voluntary Disclosure Program (OVDP) was established to allow citizens the opportunity to disclose accounts, pay monetary penalties, and avoid criminal
There are many features of the U.K. system which differ significantly from that of the U.S. One difference between the two tax structures is the U.S. does not receive revenue from value-added taxes and the U.K. does not receive revenue from sales taxes. Another difference is the tax base of the U.S. is more than 10% smaller than the U.K. Both countries are similar in allowing personal standard deductions for each dependent. Another similarity is both tax systems’ personal income tax is the greatest source of revenue for the federal and central government. The tax systems are also similar in tax rates because both have a progressive tax rate structure. The U.S. and U.K. offer personal tax exemptions for qualifying dependents. …show more content…
and U.K. are similar in tax rates because both have a progressive tax rate structure. Both structures have tax rates which are utilized in calculating the tax liability. The progressive tax is created when the personal exemptions and standard deductions are taken into account. The U.S. has an effective tax rate and a marginal tax rate. The effective tax rate is the total tax liability percentage of total income. The marginal tax rate is the tax applied to the next dollar of income that is earned, given the current income. For the 2015 U. S. tax year, single taxpayers and married taxpayers with an adjusted gross income of $413,200 and $464,850, respectively, will have a marginal tax rate of 39.6%. The U.K., it is much lower ate 23%. Similarly, the U.K. has an effective tax rate, as well as, a marginal tax rate. The effective tax is applied to incomes above the personal allowance from zero to £100,000 and the marginal tax rate is applicable to incomes above …show more content…
The U.K. tax system focus is on becoming smaller and more efficient in updating the organization and services it provides to customers. They will invest in measures to reduce tax evasion and avoidance and narrow the tax gap. By 2015, the system will reduce its costs by 25% and reinvest about £1 billion of the savings in measures to bring additional revenue. The system will seek to improve digital services, simplify processes, provide additional assistance during bereavement and retirement, improve skills of current staff, and consult with tax agents for new approaches to client transactions. The U.S. focus is on the long-term problem of combatting offshore tax evasion. International tax evasion is top priority and people hiding assets offshore could find themselves at risk of enforcement action. The U.S. will work to identify offshore account owners, as well as banks and other promoters of willful evasion of the law. In 2009, the Offshore Voluntary Disclosure Program (OVDP) was established to allow citizens the opportunity to disclose accounts, pay monetary penalties, and avoid criminal