Tax Structure : A Progressive Income Tax System

1124 Words Jul 25th, 2016 5 Pages
Tax Structure
A progressive income tax system is what most countries have adopted for taxation purposes. It appears as if this is the most suitable method as rates increase more to those who can afford to pay them. As taxes continue to increase, more and more people start talking about viable options that would benefit bottom line taxpayers. An option that has been proposed by some is the idea of having a flat rate that in theory would eliminate the concept of inequality by taxing everyone and everything at the same rate.
In order for a country to finance its government, tax rates are applied trying to distribute those costs as fair as possible. A benefit principle suggests that financing and its rates should be applied accordingly to those receiving a benefit. The ability to pay principle indicates that tax burdens should be applied based on the earning capability of individuals; those that earn more pay more and those earning less pay less.
The primary objectives of progressive taxation include distributing the burden of government taxation from those in the bottom line to those at the top of the chain. Other goals of such system are to redistribute income and the contention of intellectuals that the economic and political power of wealth requires some type of restrictions and limits.
It is safe to say that progressive tax systems allow for the existence of exemptions and deductions that “reward” all social groups; bottom, middle and high class. Some of the…
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