The year 2011 was a mercurial one in the US stock exchanges; perhaps the country is still living through the aftermaths of the 2008 financial crisis and 2009 economic meltdown. However, since coming into power, the US president, Barack Obama has done little
to the remedy of situation.
According to a recent survey by a most unlikely US organization, Central Intelligence Agency (CIA), the USA has worse income inequality than China and Iran, two of the most powerful communist countries in the world.
However, according to an American economist, Shaun Rein, the major reason for such audacity in iniquitous income distribution is because of the taxation system in the country. He quoted the tax and revenue system of China at several places in his report.
Rein emphasized on increasing taxes on the consumption of products, especially the luxurious items like lavishing cars and houses. Moreover, he asserted to reduce, or maintain the income taxes at the most, as an increase in income taxes will likely hinder
the potential for hard work and business creation, which eventually leads to job creation.
Currently, the US has a whopping 23 to 25 percent unemployment rate and this ordeal is going to continue if the US does not modify the taxation system under the circumstances. The US has two things gone north in the recent years. One, government emphasized
on increasing the income tax and mostly on the lower and middle class. Second, there is no system in place for special tax on luxury items.
On the other side of the world, China has reformatted its excise system with a totally different approach. The income tax has not been changed since the 2008 crisis that infiltrated into to Chinese economy as well. Especially, the income tax on lower and
middle class has been reduced whereas, the very vice versa has been done on elite of the country.