The concept of taxes is very complicated due to the several issues that arise in each case. In my discussion post today, I will assess the three types of taxes presented to me and try to determine the best option for them in my opinion. First, let me begin by defining the three types of taxes so that we can see what they entail.
A progressive tax is one whereby the tax rate ascends with the increase of income. In this case, the rich in the society pay more while the less wealthy are less affected. The opposite of progressive tax, the regressive one is a type of tax where a number of tax increases as income decreases that is the less wealthy people pay more than the wealthy. A flat tax is a system whereby a fixed rate of tax is employed and all citizens are deducted using that base rate regardless of their income.
My discussion will begin with first putting the regressive tax out of the question. This form of taxation is kind of unrealistic and will only aid in increasing the poverty in a country. The poor struggle to live on their little incomes and taxing them heavily only worsens their case. The less wealthy in the society should be helped come out of poverty which will boost the economy and this kind of tax is not for that idea.
The tie now comes between the progressive tax and the flat tax. Both of these taxes have their advantages and disadvantages but in this discussion, I will try and determine which one is fairest. The flat tax has a number of advantages for instance; it is easy to implement and understand, people can no longer create more loopholes and may encourage more investment since additional profit obtained will not be taxed more heavily. The disadvantages of this tax system are that it may move the tax burden towards the middle class and it may call for deductions that may affect taxpayers with low incomes adversely. The progressive tax has advantages such as; it may move the tax burden towards the wealthy, reduces the gap between the rich and the poor and it has been seen that governments can gain more income from this kind of system. Its demerits include; it can lead to corruption by politicians, people with greater earning prospects may move away from a country and it does not ensure equity amongst the citizens.
I think that the progressive tax method is the fairest form of taxation. I argue out that in an economy the poor should be given a lifting hand so that they can come out of their poverty which is good for the whole economy. This form of taxation will see the poor pay less in forms of taxes but enjoy decent public amenities. A nation that has a huge gap between the rich and the poor is always divided and these two classes rarely operate on the same wavelength. The progressive tax is, therefore, my pick in this case.
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