This approach penalizes or places an out-sized burden on middle- and low-income families. When a flat tax is legislated, each person or entity pays the same rate. Or put simply, the rich still gets richer.Īlso Check: Free Irs Approved Tax Preparation Courses Advantages And Disadvantages Of Flat Tax Can you spot the discrepancy?Įven with taxes at the same rate, well-paid individuals are well, still well paid. Person 1 would only have $900 left after taxation while Person 2 would have $9,000. They live in a country where a flat tax system is in place and the rate is 10%. It benefits the rich Lets go with another example: Person 1 earns $1,000 while Person 2 makes $10,000. With all these in consideration, do you think a flat tax is the simpler, fairer, and more beneficial tax system?ģ. Estonia has kept the flat-rate system, but it has signed up for severe fiscal and monetary austerity since the 2008 economic crash. Slovakia and the Czech Republic have changed to a progressive tax system. However, the progress was usually short lived. It may not be a feasible tax system for the long term.European countries that adopted flat-rate taxation systems, like Estonia, Slovakia, and the Czech Republic, enjoyed economic growth after implementing a flat tax. Implementing a flat tax makes the taxation system simpler and takes away the function of the bureau, ridding its employees of work.Ĥ. It can shut down the IRS.The Internal Revenue may be some peoples mortal enemy, but remember that a lot of people depend on their IRS jobs to make a living. This results in having less money to spend for necessities and paying debts, making their financial situation even worse.ģ. It makes the poor even poorer.In line with the point above, those in the lower class will be burdened even more, especially since there will be no more exemptions and deductions. It favors the wealthy.Those who are earning bigger income can enjoy paying less tax, so they end up with more money, further widening the gap between the wealthy and poor.Ģ.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |