Winners and Losers of Our Economy

1595 WordsFeb 2, 20186 Pages
1. Negatives of the Proposed Tax System The income tax system ensures a stable source of income for the government. Even at a 10% unemployment rate, the government will still make money out of the remaining 90% of the workforce. As long as the workers make money, the government will do too. Therefore, the government does not have to worry about where to get money even in an economic depression. However, this is a luxury that the government will not enjoy with a single federal taxation system. Gasoline prices and usage is affected by market trends and economic performance. At a single given time, consumption will be low. Its fluctuating price will keep affecting how much the government makes from a single gallon. Therefore, unlike the case with the income tax system, the government will not have a steady source of income. This will affect the economy and the wellbeing of the society (Nishiyama & Smetters, 2005). The proposed taxation system is also uncertain. With the income tax system, the government is able to calculate the amount of revenue it expects to collect, because it has employment records whereby all employees are registered with the Internal Revenue Service. However, with gasoline, forecasting consumption is difficult because the government will not know when the price will change, when the consumers will resort to use a substitute product, or when the supply will go down. Additionally, not every taxpayer will utilize gasoline. There are a lot of American that
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