Taxes

Many economist wonder should we change the current type of tax that we have which is a graduated progressive income tax. When they wonder this a big question of morality is what does fairness mean to us. Should we replace it with a proportional, national sales, or a value added tax? There are three criteria’s to measure the types of taxes: equity, simplicity, efficiency, and controversies.

We have right now is a graduated progressive income tax. This is a high tax rate for higher incomes. The equity of it shifts most of the tax burden to high-income families. The simplicity: it is a very complicated and difficult to understand for taxpayers and tax collectors. The efficiency is that it is very expensive and difficult to collect. The cost of collection and compliance is very high. The controversies are that it hurts economic growth by discouraging peo

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This is a very regressive tax on us.

Flat tax is a tax that has an equal rate for all incomes. This tax forces people to save and this would help economic growth. It taxes away the money of high-income people that could be saving and helping economic growth. The controversies are the taxes paid only on money spent. The tax that most comes close to helping regulate the burden is the national sales tax. The efficiency is it’s easy to collect from individuals, no need for tax filing.

Value added tax is a tax place on value manufactures add on each stage of production. The simplicity is it is very simple to understand, there are no hard tax laws to learn. The simplicity is that it would be an easier tax. No matter what, one income group will hurt and the other will prosper. The final payer of the product sees only the higher prices. The simplicity of it is that consumers do not have to file tax return, though it is a very complicated tax for businesses.

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