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What Are The Pros And Cons Of Flat Tax

Satisfactory Essays
Economics – pro
The flat tax rate ensures that successful people do not get penalized. Entrepreneurs and businesses will not have to worry about their profits being taxed at a higher marginal rate. This increases productivity and ensures that creativity is not stifled. More companies will choose to stay in the United States instead of finding tax havens.
If the proportional tax rate does away with corporate tax rate, then it would be beneficial to the U.S economy. Research shows that of “U.S corporations moved 2.5 trillion dollars” out of the U.S due to the corporate tax laws (Donachie, 2016). That is 14 percent of the gross domestic product of the United States. If these companies had stayed, it would have resulted in higher economic activity and job creation. Getting rid of the progressive tax rate would show a sign of confidence to the companies that they can set up shops in the U.S and reap the benefits.
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Having a flat tax rate could save the government ample time, money and resources. They could eliminate the thousands of tax code which would be obsolete with flat tax rate. The government could help cut down the process of filing taxes and saving money by decreasing the number of federal employees.
Conclusion
After going through the pros and cons, the proportional tax appears to be the correct choice. Governmental legislation holds high influence and create an insurmountable impact on businesses, individuals, and social issues. It makes tax an inescapable element. Opting for a simpler flat tax rate due to its simplicity is changing the good for the worse. A moment of confusion for taxpayers should not result in the poor getting more
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