Fair, Flat and Progressive Tax

1557 Words Aug 4th, 2012 7 Pages
Tax Paper

Fair Tax, Flat Tax and Progressive Tax: Which Would You Choose? Principles of Taxation

Fair Tax, Flat Tax, and Progressive Tax: Which Would You Choose? As Tax Paying Americans, Tax Plans are a very important concept in our lives. Do you feel that there is a better option out there? In this paper we will discuss the differences between the Fair Tax Plan, Flat Tax Plan and the Progressive Tax Plans. We will discuss the Pros and Cons of each plan. What is the best option out there and is there any other version that could be more acceptable? There are many proposals that have been offered in recent years, it is important to do a thorough review of all plans in order to make an
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Eliminating deductions, tax credits, and complex tax brackets also simplifies the tax code, making compliance easier. (Tonya Moreno, CPA, no date) Some proponents of the flat tax would like to see the Federal Form 1040 replaced by a simple post card on which you write your wages and multiply it by one tax rate. I can agree with that! Why is it that our current tax plan has to be so difficult to understand? Another part of the flat tax philosophy is to remove double taxation, by only taxing earned income. Things like dividends, interest on savings, or capital gains that result from investment or increases in asset value would not be taxed under a pure flat tax system. (Tonya Moreno, CPA, no date) Investopedia.com defines Flat tax as a system that applies the same tax rate to every taxpayer regardless of income bracket. A flat tax applies the same tax rate to all taxpayers, with no deductions or exemptions allowed. Flat tax system proposes that it would give taxpayers incentive to earn more because they would not be penalized with a higher tax bracket. If I know that I would take home my whole paycheck at the end of the week, I would not feel as bad when I spent a little more in stores because I know that I would still have a little extra cash to set aside. In addition, supporters argue that a flat tax system is

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