The kind of tax paid regardless of the level of income is known as the Proportional tax or Flat tax. It affects low, middle, or even high-income earners nearly equally. Although the tax system in the U.S is divided into three: Progressive, Proportional, and Regressive, two out of these three have an impact on high and low-income earners differently.
Proportional taxes are formed mainly to create equality between average tax rates and marginal tax rates paid. In this case, it encourages people from all categories to work more and spend more; nobody puts up a tax on earning more.
The proportional tax is taxed according to an individual’s annual income. In this case, if an individual earns more or earns some kind of incentive it will never be counted to pay a higher tax; their tax rates will be fixed and will only change according to the annual income changes. On another angle, this proportional tax format would be an unfair burden over the low-wage earning individuals than the high-wage earning individuals. For the low-wage earners, this tax rate will be high according to this format, and for high-wage earners, it will be sufficient.
No, it is not fair to be carrying out the same tax rates for all, regardless of income level. According to my progressive tax rates are better to be carried out. In this case, a greater percentage of taxation is over the higher income levels, and so in these, the higher income earners should afford to pay more tax and lower-income earners according to theirs. An increase in an individual’s income will affect tax liability, thus increasing the tax rate.
Some might even feel that this kind of system affects the higher income population the most and is unfair. No, it is not. Paying a certain amount of tax which might or might not be affordable for an individual according to their income status is the right way to squeeze out the taxation processor to get the right amount of tax from each individual according to their income status is the right way, let us all give it a thought.
Critics of this progressive tax system more often say this tax system is a form of inequality, as they pay more to support the nation and support the low-wage earners. So these critics support more towards the proportional tax system.
Most of the people in this world are low-wage earners or middle-wage earners, they struggle hard to live a normal sustainable life including a family to run, education, health care, and even participating in social and other cultural programs. They already undergo a certain amount of expense to run around these and have less or maybe nothing to save in case.
High-wage earners do have a high rate of income but they have a settled life with good economic and social benefits and are respected and sometimes given more opportunities than compared to the low-wage earners.
- A Speech on “Minimum Wage Laws.”
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- America Should Replace Income Taxes with A Nationwide Flat Tax
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Mark K. Stafford is an American English writer. He was born in Los Angeles and earned a BA from the University of California. He is a passionate author who wrote on Essays, Poetry, and Journalism. Now he writes full-time books and articles for TheWordyBoy.