What is a proportional tax?
Proportional tax, also known as a flat tax, is the system under which the percentage of the tax collected from the person's income remains the same, no matter how much money is obtained. This type of system can be applied to an individual's income or the entire tax system, with valid time periods anywhere from one year to life, depending on the country and the laws under which it is stipulated. Russia, Iraq, Kazakhstan and many countries in Eastern Europe charge for working citizens directly to help pay for the needs of their country; In many other countries, including the US, the system is not used, but some consider it an unfair system for lower -class citizens who are taxed by the same amount for a smaller salary.
Historical and modern applications
One of the first known examples of the proportional tax was originally known as the "tithe" that required all citizens to pay one tenth of their income, no matter how much they earnednicial purposes. Many countries have since accepted this practice, but most of them use money to support the country as a whole, unlike strict giving money to a religious designation.
The following is an example of how a proportional tax could be charged today, with a rate of 10 percent of a human income: a person who earns $ 200,000 (USD) per year would pay $ 20,000 per year in taxes, so the consumer remained $ 180,000. On the other hand, a person earning $ 10,000 per year pays $ 1,000 in taxes a year, leaving it with $ 9,000 per year to pay all expenses. The 10 percent rate is paid equally, regardless of the fact that these two people earn very different incomes.
Pros
Many arguments exist for and against proportional tax systems, as evidenced by the number of countries that such or do not use. For example, the US does not use a proportional tax systemof income, but rather use a progressive tax system where higher incomes are taxed in higher amounts than lower revenues. Other countries such as Australia, China and India decide to employ their own income taxes that are not proportional systems.
People who argue with a straight tax generally feel that the same rate across the board is the most amazing system. There are no exceptions, the rules are generally easy to understand and there should be no questions about the rate, because it is the same for each working individual. Another argument for the proportional tax system is that they can motivate people to make more money because they will not be charged a higher percentage of tax, even if they earn more. We hope that by motivating people to earn higher income, society and the quality of life will improve.
Cons
Some claim that proportional taxes are the most difficult Pay for those who are poor and feels that the proportional system is too much formsa regression tax system to be beneficial. In general, a regressive tax is one that requires a higher amount of income from a lower class than a higher class, although the regressive tax rate is the same for both classes. For example, people from the upper and lower class pay the same tax rate for the detergent box, but it can damage the pocket of a poorer person when he has less money due to his lower income. In the case of a proportional system, some argue that even if the tax rate remains constant for all, the most difficult people will pay for the poorest people because they have so little to save.