Compare And Contrast The Five Central Ideas Of The Constitution Of United States

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Compare And Contrast The Five Central Ideas Of The Constitution Of United States



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Principles of the Constitution

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The election is considered an example of a critical election , one that represents a sudden, clear, and long-term shift in voter allegiances. Those who favor stability of the current political and economic system tended to vote Republican, whereas those who would most benefit from changing the system usually favored Democrat candidates. Based on this alignment, the Democratic Party won the nixt 5 consecutive presidential elections and was able to build a political coalition that dominated Congress into the s, including holding an uninterrupted majority in the House of Representatives from to A look at the presidential election shows how the opinions of different demographic groups vary.

For instance, 55 percent of women voted for Barack Obama and 52 percent of men voted for Mitt Romney. Age mattered as well—60 percent of voters under thirty voted for Obama, whereas 56 percent of those over sixty-five voted for Romney. Racial groups also varied in their support of the candidates. Ninety-three percent of African Americans and 71 percent of Hispanics voted for Obama instead of Romney.

Breaking down voters by demographic groups may reveal very different levels of support for particular candidates or policies among the groups. The election results show clear advantages for Democratic candidates among women, indicating a gender gap between the parties. In , those with the least education and those with the most education post-graduate study tended to vote democratic.

This pattern also existed among the least educated and those with the least yearly income. Over time, the United States has become more socially liberal, especially on topics related to race and gender, and millennials—those aged 18—34—are more liberal than members of older generations and have shown a pattern of voting democratic. Also, as young Latinos reach voting age, they seem more inclined to vote than do their parents, which may raise the traditionally low voting rates among this ethnic group. Based upon data from the National Exit Poll, the election showed both continuity and change in voting among socio-economic groups.

It is obviously way too early to determine whether the changes are permanent leading to a new voting coalition for the Republican Party or rather an exception to normal voting patterns. If anything, the losing gap among males has widened for Democrats. One of the most significant changes occurred when comparing voting by educational background. Democrats continued, in fact increased, their positive margins with those having post-graduate study; but, they also increased among the college educated.

When the data is differentiated by both race and education, the Trump support among those without a college degree was shocking to most analysts. Also, Democrats maintained their majority among union households, but by a significantly reduced margin. Winning elections and implementing policy would be hard enough in simple political systems, but in a country as complex as the United States, political parties must take on great responsibilities to win elections across the many local, state, and national governing bodies. Indeed, political differences between states and local areas can contribute much complexity.

If a party stakes out issue positions on which few people agree and therefore builds too narrow a coalition of voter support, that party may find itself marginalized. But if the party takes too broad a position on issues, it might find itself in a situation where the members of the party disagree with one another, making it difficult to pass legislation, even if the party can secure victory.

Throughout the history of the United States, the political arena has been dominated by a series of two main parties with a periphery of third parties also involved in the process. In order for that influence to be meaningful, citizens must send clear signals to their leaders about what they wish the government to do. It only makes sense, then, that voters have several clearly differentiated options available to them at the polls on Election Day.

Having these options means voters can select a candidate who more closely represents their own preferences on the important issues of the day. It also gives individuals who are considering voting a reason to participate. After all, you are more likely to vote if you care about who wins and who loses. The existence of two major parties, especially in our present era of strong parties, leads to sharp distinctions between the candidates and between the party organizations. The two-party system came into being because the structure of U. Even when there are other options on the ballot, most voters understand that minor parties have no real chance of winning even a single office. Hence, they vote for one candidate of the two major parties in order to support a potential winner.

Of the members of the House and Senate, only a handful identify as something other than Republican or Democrat. Third parties have fared no better in presidential elections. No third-party candidate has ever won the presidency. A number of reasons have been suggested to explain why the structure of U. The most frequent explanation has been the process used to select its representatives. First, most elections at the state and national levels are winner-take-all: The candidate who receives the greatest overall number of votes wins. They know exactly whom to blame, or thank, for the actions of that government. Since voters do not like to waste votes, third parties must convince voters they have a real chance of winning races before voters will take them seriously.

This is a tall order given the vast resources and mobilization tools available to the existing parties. In a system in which individual candidates compete for individual seats representing unique geographic districts, a candidate must receive a fairly large number of votes in order to win. A political party that appeals to only a small percentage of voters will always lose to a party that is more popular. Winner-take-all systems of electing candidates to office, which exist in several countries other than the United States, can require that the winner receive either the majority of votes or a plurality of the votes. Plurality voting , commonly referred to as first-past-the-post, is based on the principle that the individual candidate with the most votes wins, whether or not he or she gains a majority 51 percent or greater of the total votes cast.

Plurality voting has been justified as the simplest and most cost-effective method for identifying a victor in a democracy. A single election can be held on a single day, and the victor of the competition is easily selected. Abandoning plurality voting , even if the winner-take-all election were kept, would almost certainly increase the number of parties from which voters could choose. The easiest switch would be to a majoritarian voting scheme, in which a candidate wins only if he or she enjoys the support of a majority of voters.

If no candidate wins a majority in the first round of voting, a run-off election is held among the top contenders. Some states conduct their primary elections within the two major political parties in this way. Because second-place or lower finishers will receive no reward for their efforts, those parties that do not attract enough supporters to finish first at least some of the time will eventually disappear because their supporters realize they have no hope of achieving success at the polls. This has been the fate of all U.

Third parties, often born of frustration with the current system, attract supporters from one or both of the existing parties during an election but fail to attract enough votes to win. After the election is over, supporters experience remorse when their least-favorite candidate wins instead. For example, in the election, Ralph Nader ran for president as the candidate of the Green Party. Nader, a longtime consumer activist concerned with environmental issues and social justice, attracted many votes from people who usually voted for Democratic candidates.

Bush, because Nader won Democratic votes in Florida that might otherwise have gone to Gore. Ralph Nader, a longtime consumer advocate and crusader for social justice and the environment, campaigned as an independent in a. However, in , he ran for the presidency as the Green Party candidate. In a proportional electoral system, however, parties advertise who is on their candidate list and voters pick a party. Then, legislative seats are doled out to the parties based on the proportion of support each party receives.

While the Green Party in the United States might not win a single congressional seat in some years thanks to plurality voting, in a proportional system, it stands a chance to get a few seats in the legislature regardless. For example, assume the Green Party gets 7 percent of the vote. In the United States, 7 percent will never be enough to win a single seat, shutting the Green candidates out of Congress entirely, whereas in a proportional system, the Green Party will get 7 percent of the total number of legislative seats available. Hence, it could get a foothold for its issues and perhaps increase its support over time. Moving to a proportional electoral system would involve the abandonment of the winner-take-all approach and would increase the number of parties in the U.

While a U. On this Russian ballot b , the voter is offered a choice of Social Democratic, Nationalist, Socialist, and Communist parties, among others. Even though Perot himself lost, his supporters would have been rewarded for their efforts with representatives who had a real voice in government. However, this proposal would be a major constitutional change requiring successful passage of a constitutional amendment. Electoral representation systems are not the only reason the United States has a two-party system.

We need only look at the number of parties in the British or Canadian systems, both of which are winner-take-all plurality systems like that in the United States, to see that it is possible to have more than two parties while still directly electing representatives. The two-party system is rooted in U. From the first parties to our current situation, no more than two major parties ever formed. Instead of parties arising based on region or ethnicity, various regions and ethnic groups sought a place in one of the two major parties. What are other possible explanations?

Scholars of voting behavior have suggested at least three other characteristics of the U. First, the United States has a presidential system in which the winner is selected through the Electoral College. The winner-take-all system also applies. Even if a new, third party is able to win the support of a lot of voters, it must be able to do so in several states in order to win enough electoral votes to have a chance of winning the presidency.

Besides the existence of the Electoral College, political scientist Gary W. Such parties are common in other countries. Finally, party success is strongly influenced by local election laws. Someone has to write the rules that govern elections, and those rules help to determine outcomes. In the United States, such rules have been written to make it easy for existing parties to secure a spot for their candidates in future elections. But some states create significant burdens for candidates who wish to run as independents or who choose to represent new parties.

For example, one common practice is to require a candidate who does not have the support of a major party to ask registered voters to sign a petition. We were so pumped up to get started that we went out at a. Credit: modification of work by Costa Constantinides. Visit Fair Vote for a discussion of ballot access laws across the country. Given the obstacles to the formation of third parties, it is unlikely that serious challenges to the U. But this does not mean that we should view it as entirely stable either. The U. Third-party movements may have played a role in some of these changes, but all resulted in a shifting of party loyalties among the U.

Although the Constitution explains how candidates for national office are elected, it is silent on how those candidates are nominated. Political parties have taken on the role of selecting or officially sponsoring nominees for offices, such as the presidency and seats in the Senate and the House of Representatives. Once nominated, the candidate is considered the official representative of the party for that public office, and the party supports that candidacy with the voters.

Because there are no national laws and minimal national guidelines, there is much variation in the nomination process. States pass election laws and regulations, choose the selection method for party nominees, and schedule the election, but the process also greatly depends on views of the respective political parties at the state level. States, through their legislatures, often influence the nomination method by paying for an election to help parties identify the nominee the voters prefer. Many states fund elections because they can hold several nomination races at once. In , many voters—at the same time—had to choose a presidential nominee, U. Senate nominee, House of Representatives nominee, and state-level legislature nominee for their parties.

The most common method of picking a party nominee for state, local, and presidential contests is the primary electio n. In the primary election, voters cast a ballot to indicate which candidate they desire for the party nominee. The United States is fairly unique among governments world-wide in using the election primary process as the driving force to decide who will be the nominee of a particular party. In most other countries, this decision of who to officially sponsor as a party nominee is made by small insider groups of party officials either by some form of central committee or convention. Despite the ease of voting using a ballot, primary elections have a number of rules and variations that can still cause confusion for citizens.

In a closed primary , only members of the political party selecting nominees may vote. A registered Green Party member, for example, is not allowed to vote in the Republican or Democratic primary. Parties prefer this method, because it ensures the nominee is picked by voters who legitimately support the party. An open primary allows all voters to vote. In this system, a Green Party member is allowed to pick either a Democratic or Republican ballot when voting.

Modified primary sometimes called semi-closed allows independent voters, who are not affiliated with any political party, to enter the party primary of their choice. For state-level office nominations, or the nomination of a U. Senator or House member, some states use the top-two primary method. A top-two primary , sometimes called a jungle primary , pits all candidates against each other, regardless of party affiliation. The two candidates with the most votes become the final candidates for the general election. Thus, two candidates from the same party could run against each other in the general election. In one California congressional district, for example, four Democrats and two Republicans all ran against one another in the June primary.

The two Republicans received the most votes, so they ran against one another in the general election in November. In general, parties do not like nominating methods that allow non-party members to participate in the selection of party nominees. Despite the common use of the primary election system, in fourteen states used a caucus system. Volunteers record the votes and no poll workers need to be trained or compensated. Similar to primary elections, caucuses can either be closed, open, or modified. Caucuses are held every two years in more than Iowa precincts. Credit: OpenStax posted image. The caucus system receives the most national media attention when it is part of the presidential nomination process.

The Iowa Democratic Presidential Caucus is well-known for its spirited nature. The voters then get to argue and discuss the candidates, sometimes in a very animated and forceful manner. After a set time, party members are allowed to realign before the final count is taken. The caucus leader then determines how many members support each candidate, which determines how many delegates each candidate will receive.

Likewise, the Iowa Republican Presidential Caucus also kicks-off the presidential nomination process and requires its members to go to special meeting places to express their preferences for a nominee and delegates pledged to a particular candidate. The caucus has its proponents and opponents. Many argue that it is more interesting than the primary and brings out more sophisticated voters, who then benefit from the chance to debate the strengths and weaknesses of the candidates.

The caucus system is also more transparent than ballots. The local party members get to see the election outcome and pick the delegates who will represent them at the national convention. Opponents point out that caucuses take two to three hours and are intimidating to less experienced voters. Voter turnout for a caucus is generally 20 percent lower than for a primary. Regardless of which nominating system, the primary election or caucus, the states and parties choose, states must also determine which day they wish to hold their nomination. When the nominations are for state-level office, such as governor, the state legislatures receive little to no input from the national political parties.

In presidential election years, however, the national political parties establish rules to govern the primary or election process and how candidates can acquire the necessary number of pledged delegates to the national convention to be officially nominated by their party. Finally, the order in which the primary elections and caucus selections are held shape the overall race. Generally, these three contests, have played a major role in reducing the number of viable candidates running for the nomination of their respective parties.

Other states, especially large states like California, Florida, Michigan, and Wisconsin, often have been frustrated that they must wait to hold their presidential primary elections for delegates later in the season. Their frustration is reasonable: candidates who do poorly in the first few primaries often drop out entirely, leaving fewer candidates to run in caucuses and primaries held in February and later.

In response, Florida and Michigan moved their primaries to January and many other states moved forward to March. This was not the first time states participated in front-loading and scheduled the majority of the primaries and caucuses at the beginning of the primary season. It was, however, one of the worst occurrences. Nine 9 states do not have a tax on ordinary personal incomes. Two states with a tax only on interest and dividend income of individuals, are New Hampshire and Tennessee. State and local taxes are generally deductible in computing federal taxable income. Federal and many state individual income tax rate schedules differ based on the individual's filing status.

Taxable income is gross income [20] less adjustments and allowable tax deductions. Gross income includes "all income from whatever source", and is not limited to cash received. Income from illegal activities is taxable and must be reported to the IRS. The amount of income recognized is generally the value received or which the taxpayer has a right to receive. Certain types of income are specifically excluded from gross income. The time at which gross income becomes taxable is determined under federal tax rules.

This may differ in some cases from accounting rules. Certain types of income are excluded from gross income and therefore subject to tax exemption. For federal income tax, interest income on state and local bonds is exempt, while few states exempt any interest income except from municipalities within that state. In addition, certain types of receipts, such as gifts and inheritances, and certain types of benefits, such as employer-provided health insurance, are excluded from income.

Foreign non-resident persons are taxed only on income from U. These brackets are the taxable income plus the standard deduction for a joint return. That deduction is the first bracket. The next column is the tax divided by 89, The new law is the next column. The singles' sets of markers can be set up quickly. The brackets with its tax are cut in half. Itemizers can figure the tax without moving the scale by taking the difference off the top. After seven years the papers can be destroyed; if unchallenged. Source and Method [25] [26].

Businesses selling goods reduce gross income directly by the cost of goods sold. In addition, businesses may deduct most types of expenses incurred in the business. Some of these deductions are subject to limitations. Some types of business expenses are deductible over a period of years rather than when incurred. These include the cost of long lived assets such as buildings and equipment. The cost of such assets is recovered through deductions for depreciation or amortization. In addition to business expenses, individuals may reduce income by an allowance for personal exemptions [32] and either a fixed standard deduction or itemized deductions.

The standard deduction amount varies by taxpayer filing status. Itemized deductions by individuals include home mortgage interest, property taxes, certain other taxes, contributions to recognized charities, medical expenses in excess of 7. Personal exemptions, the standard deduction, and itemized deductions are limited phased out above certain income levels. Corporations must pay tax on their taxable income independently of their shareholders. A limited liability company and certain other business entities may elect to be treated as corporations or as partnerships. Many states also allow corporations to elect S corporation status.

Charitable organizations are subject to tax on business income. Certain transactions of business entities are not subject to tax. These include many types of formation or reorganization. A wide variety of tax credits may reduce income tax at the federal [42] and state levels. Some credits are available only to individuals, such as the child tax credit for each dependent child, American Opportunity Tax Credit [43] for education expenses, or the Earned Income Tax Credit for low income wage earners. Some credits, such as the Work Opportunity Tax Credit, are available to businesses, including various special industry incentives. A few credits, such as the foreign tax credit , are available to all types of taxpayers.

The United States federal and state income tax systems are self-assessment systems. Taxpayers must declare and pay tax without assessment by the taxing authority. Quarterly payments of tax estimated to be due are required to the extent taxes are not paid through withholdings. The second and fourth "quarters" are not a quarter of a year in length. The second "quarter" is two months April and May and the fourth is four months September to December. Forty-three states and many localities in the U. Forty-seven states and many localities impose a tax on the income of corporations.

Tax rates vary by state and locality, and may be fixed or graduated. Most rates are the same for all types of income. State and local income taxes are imposed in addition to federal income tax. State and local taxable income is determined under state law, and often is based on federal taxable income. Most states conform to many federal concepts and definitions, including defining income and business deductions and timing thereof. Most states do not allow a deduction for state income taxes for individuals or corporations, and impose tax on certain types of income exempt at the federal level.

Some states have alternative measures of taxable income, or alternative taxes, especially for corporations. States imposing an income tax generally tax all income of corporations organized in the state and individuals residing in the state. Taxpayers from another state are subject to tax only on income earned in the state or apportioned to the state. Businesses are subject to income tax in a state only if they have sufficient nexus in connection to the state. Foreign individuals and corporations not resident in the United States are subject to federal income tax only on income from a U. Payers of some types of income to non-residents must withhold federal or state income tax on the payment.

Such treaties do not apply to state taxes. An alternative minimum tax AMT is imposed at the federal level on a somewhat modified version of taxable income. The tax base is adjusted gross income reduced by a fixed deduction that varies by taxpayer filing status. Itemized deductions of individuals are limited to home mortgage interest, charitable contributions, and a portion of medical expenses. A credit against future regular income tax is allowed for such excess, with certain restrictions. Many states impose minimum income taxes on corporations or a tax computed on an alternative tax base. These include taxes based on capital of corporations and alternative measures of income for individuals.

Details vary widely by state. In the United States, taxable income is computed under rules that differ materially from U. Since only publicly traded companies are required to prepare financial statements, many non-public companies opt to keep their financial records under tax rules. Corporations that present financial statements using other than tax rules must include a detailed reconciliation of their financial statement income to their taxable income as part of their tax returns.

Key areas of difference include depreciation and amortization, timing of recognition of income or deductions, assumptions for cost of goods sold , and certain items such as meals and entertainment the tax deduction for which is limited. Income taxes in the United States are self-assessed by taxpayers [51] by filing required tax returns. These returns disclose a complete computation of taxable income under tax principles. Taxpayers compute all income, deductions, and credits themselves, and determine the amount of tax due after applying required prepayments and taxes withheld.

Federal and state tax authorities provide preprinted forms that must be used to file tax returns. IRS Form series is required for individuals, Form series for corporations, Form for partnerships, and Form series for tax exempt organizations. The state forms vary widely, and rarely correspond to federal forms. Groups of corporations may elect to file consolidated returns at the federal level and with a few states. Electronic filing of federal and many state returns is widely encouraged and in some cases required, and many vendors offer computer software for use by taxpayers and paid return preparers to prepare and electronically file returns.

Individuals and corporations pay U. The tax rate depends on both the investor's tax bracket and the amount of time the investment was held. Short-term capital gains are taxed at the investor's ordinary income tax rate and are defined as investments held for a year or less before being sold. Long-term capital gains , on dispositions of assets held for more than one year, are taxed at a lower rate. In the United States, payroll taxes are assessed by the federal government, many states, the District of Columbia, and numerous cities. These taxes are imposed on employers and employees and on various compensation bases. They are collected and paid to the taxing jurisdiction by the employers.

Most jurisdictions imposing payroll taxes require reporting quarterly and annually in most cases, and electronic reporting is generally required for all but small employers. Federal, state, and local withholding taxes are required in those jurisdictions imposing an income tax. Employers having contact with the jurisdiction must withhold the tax from wages paid to their employees in those jurisdictions. Income taxes withheld from payroll are not final taxes, merely prepayments. Employees must still file income tax returns and self assess tax, claiming amounts withheld as payments.

Federal social insurance taxes are imposed equally on employers [58] and employees, [59] consisting of a tax of 6. To the extent an employee's portion of the 6. Employers are subject to unemployment taxes by the federal [63] and all state governments. The tax is a percentage of taxable wages [64] with a cap. The tax rate and cap vary by jurisdiction and by employer's industry and experience rating. Employers must report payroll taxes to the appropriate taxing jurisdiction in the manner each jurisdiction provides. Quarterly reporting of aggregate income tax withholding and Social Security taxes is required in most jurisdictions. Each employer is required to provide each employee an annual report on IRS Form W-2 [69] of wages paid and federal, state and local taxes withheld, with a copy sent to the IRS and the taxation authority of the state.

These are due by January 31 and February 28 March 31 if filed electronically , respectively, following the calendar year in which wages are paid. The Form W-2 constitutes proof of payment of tax for the employee. Employers are required to pay payroll taxes to the taxing jurisdiction under varying rules, in many cases within 1 banking day. Payment of federal and many state payroll taxes is required to be made by electronic funds transfer if certain dollar thresholds are met, or by deposit with a bank for the benefit of the taxing jurisdiction. Failure to properly file monthly or quarterly returns may result in additional penalties. A particularly severe penalty applies where federal income tax withholding and Social Security taxes are not paid to the IRS.

There is no federal sales or use tax in the United States. All but five states impose sales and use taxes on retail sale, lease and rental of many goods, as well as some services. Many cities, counties, transit authorities and special purpose districts impose an additional local sales or use tax. Sales and use tax is calculated as the purchase price times the appropriate tax rate. Sales tax is collected by the seller at the time of sale. Use tax is self assessed by a buyer who has not paid sales tax on a taxable purchase. Unlike value added tax , sales tax is imposed only once, at the retail level, on any particular goods. Nearly all jurisdictions provide numerous categories of goods and services that are exempt from sales tax, or taxed at a reduced rate.

Purchase of goods for further manufacture or for resale is uniformly exempt from sales tax. Most jurisdictions exempt food sold in grocery stores, prescription medications, and many agricultural supplies. Generally cash discounts, including coupons, are not included in the price used in computing tax. Sales taxes, including those imposed by local governments, are generally administered at the state level. States imposing sales tax require retail sellers to register with the state, collect tax from customers, file returns, and remit the tax to the state. Procedural rules vary widely. Sellers generally must collect tax from in-state purchasers unless the purchaser provides an exemption certificate. Most states allow or require electronic remittance of tax to the state.

States are prohibited from requiring out of state sellers to collect tax unless the seller has some minimal connection with the state. Excise taxes may be imposed on the sales price of goods or on a per unit or other basis, in theory to discourage consumption of the taxed goods or services. Excise tax may be required to be paid by the manufacturer at wholesale sale, or may be collected from the customer at retail sale. Excise taxes are imposed at the federal and state levels on a variety of goods, including alcohol, tobacco, tires, gasoline, diesel fuel, coal, firearms, telephone service, air transportation, unregistered bonds, and many other goods and services. Some jurisdictions require that tax stamps be affixed to goods to demonstrate payment of the tax.

Most jurisdictions below the state level in the United States impose a tax on interests in real property land, buildings, and permanent improvements. Some jurisdictions also tax some types of business personal property. Property tax is based on fair market value of the subject property. The amount of tax is determined annually based on the market value of each property on a particular date, [80] and most jurisdictions require redeterminations of value periodically.

The tax is computed as the determined market value times an assessment ratio times the tax rate. In other i. Common estimation techniques include comparable sales, depreciated cost, and an income approach. Property owners may also declare a value, which is subject to change by the tax assessor. Property taxes are most commonly applied to real estate and business property. Real property generally includes all interests considered under that state's law to be ownership interests in land, buildings, and improvements.

Ownership interests include ownership of title as well as certain other rights to property. Automobile and boat registration fees are a subset of this tax. Other nonbusiness goods are generally not subject to property tax, though Virginia maintains a unique personal property tax on all motor vehicles, including non-business vehicles. The assessment process varies by state, and sometimes within a state.

Each taxing jurisdiction determines values of property within the jurisdiction and then determines the amount of tax to assess based on the value of the property. Tax assessors for taxing jurisdictions are generally responsible for determining property values. The determination of values and calculation of tax is generally performed by an official referred to as a tax assessor. Property owners have rights in each jurisdiction to declare or contest the value so determined.

Property values generally must be coordinated among jurisdictions, and such coordination is often performed by equalization. Once value is determined, the assessor typically notifies the last known property owner of the value determination. After values are settled, property tax bills or notices are sent to property owners. If a property owner fails to pay the tax, the taxing jurisdiction has various remedies for collection, in many cases including seizure and sale of the property. Property taxes constitute a lien on the property to which transfers are also subject.

Mortgage companies often collect taxes from property owners and remit them on behalf of the owner. The United States imposes tariffs or customs duties on imports of goods. The duty is levied at the time of import and is paid by the importer of record. Customs duties vary by country of origin and product. Goods from many countries are exempt from duty under various trade agreements. Certain types of goods are exempt from duty regardless of source.

Customs rules differ from other import restrictions. Failure to properly comply with customs rules can result in seizure of goods and criminal penalties against involved parties. Goods may be imported to the United States subject to import restrictions. Importers of goods may be subject to tax "customs duty" or "tariff" on the imported value of the goods. Goods may be stored in a bonded warehouse or a Foreign-Trade Zone in the United States for up to five years without payment of duties. Goods must be declared for entry into the U.

Many importers participate in a voluntary self-assessment program with CBP. Special rules apply to goods imported by mail. Examples include laptop computers used by persons traveling in the U. Rates of tax on transaction values vary by country of origin. Goods must be individually labeled to indicate country of origin, with exceptions for specific types of goods. Goods are considered to originate in the country with the highest rate of duties for the particular goods unless the goods meet certain minimum content requirements. Extensive modifications to normal duties and classifications apply to goods originating in Canada or Mexico under the North American Free Trade Agreement.

International Trade Commission. This lengthy schedule [87] provides rates of duty for each class of goods. Most goods are classified based on the nature of the goods, though some classifications are based on use. Customs duty rates may be expressed as a percentage of value or dollars and cents per unit. Some duties are based in part on value and in part on quantity. Where goods subject to different rates of duty are commingled, the entire shipment may be taxed at the highest applicable duty rate. Imported goods are generally accompanied by a bill of lading or air waybill describing the goods. For purposes of customs duty assessment, they must also be accompanied by an invoice documenting the transaction value. The goods on the bill of lading and invoice are classified and duty is computed by the importer or CBP.

The amount of this duty is payable immediately, and must be paid before the goods can be imported. Most assessments of goods are now done by the importer and documentation filed with CBP electronically. After duties have been paid, CBP approves the goods for import. They can then be removed from the port of entry, bonded warehouse, or Free-Trade Zone. After duty has been paid on particular goods, the importer can seek a refund of duties if the goods are exported without substantial modification.

The process of claiming a refund is known as duty drawback. Certain civil penalties apply for failures to follow CBP rules and pay duty. Goods of persons subject to such penalties may be seized and sold by CBP. In addition, criminal penalties may apply for certain offenses. Criminal penalties may be as high as twice the value of the goods plus twenty years in jail. Foreign-Trade Zones are secure areas physically in the United States but legally outside the customs territory of the United States.

Such zones are generally near ports of entry. They may be within the warehouse of an importer. Such zones are limited in scope and operation based on approval of the Foreign-Trade Zones Board. Foreign goods may be used to manufacture other goods within the zone for export without payment of customs duties. Estate and gift taxes in the United States are imposed by the federal and some state governments. It is imposed on the estate, not the beneficiary. Some states impose an inheritance tax on recipients of bequests. Gift taxes are levied on the giver donor of property where the property is transferred for less than adequate consideration.

An additional generation-skipping transfer GST tax is imposed by the federal and some state governments on transfers to grandchildren or their descendants. The federal gift tax is applicable to the donor, not the recipient, and is computed based on cumulative taxable gifts, and is reduced by prior gift taxes paid. The federal estate tax is computed on the sum of taxable estate and taxable gifts, and is reduced by prior gift taxes paid. Rates and exclusions have varied, and the benefits of lower rates and the credit have been phased out during some years. Taxable gifts are certain gifts of U. Taxable estates are certain U. For aliens, residence for estate tax purposes is primarily based on domicile, but U.

The taxable amount of a gift is the fair market value of the property in excess of consideration received at the date of gift. The taxable amount of an estate is the gross fair market value of all rights considered property at the date of death or an alternative valuation date "gross estate" , less liabilities of the decedent, costs of administration including funeral expenses and certain other deductions. State estate taxes are deductible, with limitations, in computing the federal taxable estate. Bequests to charities reduce the taxable estate. Gift tax applies to all irrevocable transfers of interests in tangible or intangible property. Estate tax applies to all property owned in whole or in part by a citizen or resident at the time of his or her death, to the extent of the interest in the property.

Generally, all types of property are subject to estate tax. Certain interests in property that lapse at death such as life insurance are included in the taxable estate. Taxable values of estates and gifts are the fair market value. For some assets, such as widely traded stocks and bonds, the value may be determined by market listings. The value of other property may be determined by appraisals, which are subject to potential contest by the taxing authority.

Special use valuation applies to farms and closely held businesses , subject to limited dollar amount and other conditions. Monetary assets, such as cash, mortgages, and notes, are valued at the face amount, unless another value is clearly established. Life insurance proceeds are included in the gross estate. The value of a right of a beneficiary of an estate to receive an annuity is included in the gross estate. Certain transfers during lifetime may be included in the gross estate. Certain powers of a decedent to control the disposition of property by another are included in the gross estate.

The taxable estate of a married decedent is reduced by a deduction for all property passing to the decedent's spouse. Certain terminable interests are included. Other conditions may apply. Donors of gifts in excess of the annual exclusion must file gift tax returns on IRS Form and pay the tax. Executors of estates with a gross value in excess of the unified credit must file an estate tax return on IRS Form and pay the tax from the estate. Returns are required if the gifts or gross estate exceed the exclusions. Each state has its own forms and filing requirements. Tax authorities may examine and adjust gift and estate tax returns. Many jurisdictions within the United States impose taxes or fees on the privilege of carrying on a particular business or maintaining a particular professional certification.

These licensing or occupational taxes may be a fixed dollar amount per year for the licensee, an amount based on the number of practitioners in the firm, a percentage of revenue, or any of several other bases. Persons providing professional or personal services are often subject to such fees. Common examples include accountants, attorneys, barbers, casinos, dentists, doctors, auto mechanics, plumbers, and stock brokers.

In addition to the tax, other requirements may be imposed for licensure. All 50 states impose vehicle license fee. Generally, the fees are based on type and size of vehicle and are imposed annually or biannually. All states and the District of Columbia also impose a fee for a driver's license, which generally must be renewed with payment of fee every few years. Fees are often imposed by governments for use of certain facilities or services. Such fees are generally imposed at the time of use. Multi-use permits may be available. For example, fees are imposed for use of national or state parks, for requesting and obtaining certain rulings from the U.

Internal Revenue Service IRS , for the use of certain highways called "tolls" or toll roads , for parking on public streets, and for the use of public transit. Taxes in the United States are administered by hundreds of tax authorities. At the federal level there are three tax administrations. Most domestic federal taxes are administered by the Internal Revenue Service, which is part of the Department of the Treasury. Taxes on imports customs duties are administered by U. Organization of state and local tax administrations varies widely. Every state maintains a tax administration. A few states administer some local taxes in whole or part.

Most localities also maintain a tax administration or share one with neighboring localities. The Internal Revenue Service administers all U. IRS functions include:. Taxpayers generally file most types of tax returns by mail with these Service Centers, or file electronically. The selection of returns uses a variety of methods based on IRS experiences. On examination, the IRS may request additional information from the taxpayer by mail, in person at IRS local offices, or at the business location of the taxpayer. The taxpayer is entitled to representation by an attorney , Certified Public Accountant CPA , or enrolled agent , at the expense of the taxpayer, who may make representations to the IRS on behalf of the taxpayer.

Taxpayers have certain rights in an audit. Upon conclusion of the audit, the IRS may accept the tax return as filed or propose adjustments to the return. The IRS may also assess penalties and interest. Generally, adjustments must be proposed within three years of the due date of the tax return. Certain circumstances extend this time limit, including substantial understatement of income and fraud. If the IRS proposes adjustments, the taxpayer may agree to the adjustment, appeal within the IRS , or seek judicial determination of the tax.

In addition to enforcing tax laws, the IRS provides formal and informal guidance to taxpayers. IRS guidance consists of:. TTB has six divisions, each with discrete functions:. It has a workforce of over 58, employees covering over official ports of entry to the United States. CBP has authority to seize and dispose of cargo in the case of certain violations of customs rules. Every state in the United States has its own tax administration, subject to the rules of that state's law and regulations. For example, the California Franchise Tax Board. These are referred to in most states as the Department of Revenue or Department of Taxation. The powers of the state taxing authorities vary widely. Most enforce all state level taxes but not most local taxes.

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