Pros and cons of flat tax rate8/29/2023 ![]() Wealthy individuals can sometimes pay less in taxes than those who make $20k per year for the same reason. One of the biggest issues that faces the current progressive taxation system is that a number of businesses are exempt from taxes because of credits or subsidies that are in place. That same rate would get applied if someone made $1 million as well, so everyone would get to keep the same amount of every dollar earned. When someone sees a road, they should be able to say “I helped pay for that.” Even if all they contributed was $100 because they made $1,000 that year in a flat tax system, there is more pride that comes from knowing that something great was made from personalized work. ![]() This simplistic system would streamline the filing process, especially if deductions and credits were eliminated as well, that tax returns could be filed and processed in just a few minutes instead of a few hours.įor a government to properly function, everyone should have some skin in the game. For every bit of cash that is earned, no matter how much money is earned over the course of a year, a specific percentage of that would be sent to the government. The Pros of a Flat Tax RateĪ flat tax rate completely eliminates the need for a progressive set of taxation percentages. There are some pros and cons to initiating a flat tax rate, however, so here is a look at the key points to consider. That’s why a flat tax is often proposed as a way to fix the problem. It’s thousands of pages of regulations, deductions, and reporting laws that is enough to even make an experienced accountant’s head spin. The modern system of taxation is complicated at best.
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