Progressive taxation: Is it fair?

Summary

In this article it talks about how progressive taxation can be unfair to every citizen, rich or poor. but it also argues that it can be beneficial to the economy, by providing better service with the taxes collected. It mentions about this tax implentation giving commonwealth to common good, as to say by paying taxes , countries such as america gives protection and empowerment that serve the common good. because of this common wealth, the people are protected and America's empowering infrastructure is available to all. That is a fundamental America value: the common wealth should serve the common good. It is believed it benefits everyone.


Connection
In this chapter we talked about three different tax implentations which were, Progressive approach, propotional tax, and regressive tax. Relating to the article, progressive taxation is one in which the percentage of income an individual pays in taxes increases as the individual's level of income increases. It can to apply to adjustment of the tax base by using tax excemptions,tax credits, or selective taxation that would create progressive distributional effects. For example, a sales tax on expensive goods or the exemption of basic necessities may be described as having progressive effects as it increases a tax burden on high end consumption or decreases a tax burden on low end consumption . In canada , taxes have always been low for the rich. Canada has never had a firm progressive tax system. The highest corporate tax Canada has ever had was 46.6% in the year 2000 . Considering the billions of dollars in revenue that those corporations have, it is not unreasonable to tax at least 50% or even more, specially considering the fact that many of those large corporations are multinationals, owned by other countries. The result of tax breaks is obvious- the money is very often invested somewhere else. Corporations are always looking for profits; therefore they will invest wherever they can find more profits.

Reflection

I personally don't favour the progressive approach , because the tax burden imposed on people who earn a lot and the tax burden on people who earn very little will be bigger than the difference in income earned by both groups. A person who makes 10 times what another person makes will pay more than 10 times as much in taxes. If the tax system is regressive, then the opposite is true. With a regressive approach you are able to keep most of your hard earned cash with low tax brackets as you earn more income.

Source:http://www.rockridgeinstitute.org/research/lakoff/progressive-taxation-some-hidden-truths.html