Reflections Of The Progressive And Flat Rate Tax Structure

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Reflections of the Progressive and Flat Rate Tax Structure
Tax structures are complex and play a prevalent role in American society. Taxation is important to understand because the designed tax policies are intended to foster economic stimulation and behavior. Although economists differ on the appropriate American taxation structure, taxation promotes both incentives and disincentives in behavioral outcomes. These differing views are debated to whether the United States should adjust from its present progressive income tax structure, or an alternative taxation structure, such as a proportional, or flat rate tax. Whether a progressive income tax structure or a flat rate structure, it is essential to understand the advantages and disadvantages and its effects on economic stimulation and behavior.
Progressive Income Tax Structure
The United States tax structure is considered a progressive income tax; a tax that takes a greater percentage from the income of high-income earners than it does from low-income individuals (Hyman, 2014). Essentially, progressive income tax is an effective mean of income redistribution among the various wage earnings. The amount of income tax an individual owes is based on both the filing status, deductions, and income level. Many consider progressive taxation as the favorable tax structure system because it helps the government to yield more taxes, or revenue, as well as protect the lower income individuals from the burden of high taxes.
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