Policy Purpose:
To exempt individuals under 18 years of age from income tax, aligning tax obligations with the principle that individuals too young to vote should not be subject to taxation.
Background & Rationale:
Current tax law requires income tax payments from individuals under 18, who legally lack the right to vote. This policy recognizes that minors, as non-voting citizens, do not have representation in government decision-making. Based on the principle of “no taxation without representation,” this policy argues that the taxation of minors without voting rights is inequitable.
Policy Statement:
- Eligibility for Exemption:
All individuals under 18 years of age are exempt from federal income tax on income earned through employment, small business ventures, or investments up to a specified cap.
- Income Cap:
To avoid potential abuses and ensure fairness, an annual income cap may be set. Income exceeding this cap would be subject to regular tax rates.
- Automatic Adjustments:
The income cap will be reviewed annually and adjusted according to inflation rates and cost-of-living indices to reflect economic changes.
- Enforcement & Compliance:
Employers and financial institutions are required to report income earned by individuals under 18, even if it falls under the exemption limit, to ensure transparency and compliance.
- Rationale for Policy:
This policy is grounded in the fundamental democratic principle that individuals should not be taxed without representation. Minors lack voting rights and, therefore, should not bear the financial burden of income tax. It aims to ease financial burdens on young people and encourage financial responsibility and independence.
Implementation & Review:
The policy would take effect in the tax year following approval and will undergo a periodic review every five years. This review will assess the policy’s impact on young taxpayers and the federal budget to ensure its effectiveness and sustainability.
Benefits:
Reduces the financial burden on young earners.
Encourages employment and financial responsibility among youth.
Reinforces democratic principles by aligning taxation with voting rights.
Challenges:
Potential revenue loss may need to be offset in the federal budget.
Systems must be established to monitor compliance with the exemption cap.
This policy advocates for an income tax exemption for young earners, aiming to foster fairness in tax obligations while encouraging youth engagement in the workforce.