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A Better TaxApr 07 '00 Write an essay on this topic.I believe the tax problem comes down to fairness,and fairness is about symmetry. The core of the problem has to do with the main principle of economics which is efficiency-in the sense of preserving incentives for productive behavior. So I want to propose what perhaps could be a better tax. But first of all I want to discuss the present tax that is in place today. That is the progressive income tax. This tax is preferred because it places a higher burden on the rich. But of course the wealthy aren't happy with this current tax. Simply stated, the progressive income tax is depended upon income. The more one makes, the more one will pay. By contrast, there is another income tax called a head tax. This tax will tax each person a constant amount regardless of income. No matter if your income is $5000/year or $5,000,000/year, each person will be taxed $3000, for example. I think this tax is totally ridiculous. It is obvious by the aforementioned example. Three thousand dollars is more than half the income of the person who only makes $5000 a year whereas $3000 in taxes in insignificant for the person making five million. So I propose a tax that takes a new spin on both of the above taxes. I believe that a income tax which taxes the same percentage regardless of income would work better. As in the progressive tax, the wealthy will stay pay a higher share but it will be significantly reduced, and in the pure head tax the burden will be a lot less for those with lower incomes. Let's take an example where the government would tax each person 10% of their income. For the person making $5000/year that would amount to $500 in tax money. For the person making $5,000,000 that would amount to $500,000 in government revenue. Although I think no taxation is the best taxation (and that will never happen), this last example is clearly the best of the three. When governments tax efficiently, they are less likely to tax excessively.  |
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