What are the advantages and disadvantages of income tax?

earnings tax is income tax, whether it is a salary, heritage or investment profits. This is often contrasted with a tax on consumption where taxes are stored on consumed goods and services. Some claim that consumption tax is more logical because it is claimed that people who earn more would spend more reasonably more, which would be fairer. Others, however, claim that there is no warranty about this and that consumption tax would cause consumer prices to increase significantly.

Advantages of income tax can include the following:

• People are taxed on the basis of total income, so people who do less theoretically pay less.
• Not all people consume the same rate, so earnings tax is a fairer evaluation of tax than for consumption tax.
• People with lower incomes would be most affected by the consumption of consumption, as they would mean the necessary items such as automobile more expensive.
• income is easiera way to collect taxes and decide on deductions. While people can deal with several paycheck that they have to save, people can have to save income for each purchase they have done during the year to qualify for tax relief.

This type of tax also has disadvantages:

• Tax collection is generally considered more difficult than consumption tax that would be collected at the point of sale.
• For those in the middle class and lower classes, revenue tax can be financial problems, regardless of the amount.
• Some believe that income tax is a violation of the individual freedom of the citizen. He claims that he violates the individual's right to decide how to use the money he earns.
• People paid "under the table" can avoid paying any income taxes.

Both methods of taxation are used in the United States. Most stateIt and many cities store on certain items consumption or tax tax. Many also require people to pay a state income tax as well as the federal government. This leads to the claim that US citizens are unduly taxed according to the place where they live, be it the state, the region to the region or the rural versus of the urban area. Those who claim to be the disadvantage of the current system believe that it would be best to have one system in place that evaluates taxation more fairly.

The idea that has received growing support is called FAIRTAX. This would be similar to taxation tax and some feel that it would not only be beneficial for individuals, but also corporations. In this plan, people would pay 23% tax on the purchase of most goods and services, often excluding food. When adding to a state turnover tax, this would increase in most cases from purchases to approximately 30%. Some advocates claim that this method of lower prices and production cheaper. Others say the middle class would carry the burden of greaterNY taxes within FAIRTAX.

The taxation method is complex that requires extraordinary control. Any change in the method of taxation in the US would require approval of congress and possibly constitutional changes.