Flat Tax vs. Progressive Tax

In: Business and Management

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Progressive Tax vs. Flat Tax

The United States economy, as known by all, is not in its best shape. One way in which the government gains money is by imposing taxes on people. There are many taxes that are placed on different things that everyone needs or already has. The United States uses a taxation system which is criticized by many. The system used in Progressive Tax; however, many people believe the system of Flat Tax, or Proportional Tax, should be the system that is used for taxing. In a Progressive Tax system, a larger percentage of income is taken from those who are wealthy or have a large annual income, in taxes. Those who have low incomes do not have as high tax percentage to pay because progressive tax is based on ability to pay. For example, with progressive tax, people with the lowest incomes will pay 10% in taxes, those with the largest incomes would pay about 30%, and the middle class would pay somewhere in the middle. Flat tax is another way to say proportional tax and a Flat Tax system is a system in which the same percentage of income is taken from everyone. This means that no matter how much of an annual income you make, whether it be $20,000 or $200,000, everyone pays the same amount in taxes. Some people favor Progressive Tax, and others prefer a Flat Tax system. Both systems have their disadvantages and advantages. A Progressive Tax system gives the idea that everything is fair because everyone pays according to how much they earn. While this is true in a sense, this type of system creates many loop holes. The system was created so that as a person's income increases, the percentage of income they pay in taxes also increases. By doing this it decreases some overwhelming wealth gaps. While all of this is beneficial there are many disadvantages to this type of system. It is very complex; therefore, many…...

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