In the paper clearly defines the term progressive taxation. He also presents an argument that has points in favor of this taxation system and against the system. He considers progressive system fair in a way that it promotes harmony, equality and economic stability in the society. The writer argues against the system by saying it unjust and inequality with the rich people. Moreover, he considers it favoritism for the poor. The points in the topic present an in depth research regarding the progressive method of taxation and presents all the positivity and negativity.
Is Progressive Taxation Fair? What Arguments Could Be Made That It Is Fair Or Unfair?
Progressive taxation is when the government charges the individual according to their disposable income. The government sets a fiscal policy system in which wealthier people are charged more taxes compared to less well-off people. Taxation system is divided into tax brackets and those with lower income are charged with low tax compared to people with higher incomes who fall in the bracket where tax charges are higher. There is another taxation system such as flat rate taxation in which every individual is charged with the same tax; be it poor or rich but many people argue against this method and vote for progressive taxation.
Going in favor of progressive tax and saying it ‘fair’ is a bit difficult as it is a very debatable topic, and there are justifications for and against progressive method. Those in favor of progressive taxation justify the method by saying it an effective method of redistributing the income from the rich people to the poor people. By taking money from the rich in the form of taxes, government can use the money for social welfare programs used by the poor. Moreover, taking equal amount of tax from rich and poor is unjust with the poor people as they do not have sufficient resources to fulfill their basic needs and also bear the burden of equal taxation. Rich people argue against this justification by saying the method unjust and partiality with the rich. They justify their point by explaining that the income they earn is through extra hard work and huge efforts; and by being charged more tax, government steals their money and treat them unequally (McMurtry, 2013).
Proponents of progressive taxation states that it is also beneficial for rich people to pay more taxes as tax revenue helps in the development of state and economy which is automatically more beneficial for the success and prosperity of their business. They also believe that rich people take more advantage from the state utilities and country resources compared to the poor; therefore they should not hesitate in paying more. Critics argue against this point by saying that government punishes the individual for his success in business and wealth by taking more taxes that are unjust. If laws and rights for all individuals in the country are same and equal then why government does expect the rich people to contribute more from their personal wealth.
Every taxation methods have its pros and cons and judging the progressive tax system on the criteria of its fairness is not the correct approach. Tax methods should be selected according to the need of the economy and for that purpose; if progressive method is more suitable then, this is the best method of revenue collection.
Bartlett, B. R. (2013). The benefit and the burden: tax reform, why we need it and what it will take. New York: Simon & Schuster Paperbacks.
McMurtry, J. (2013). The cancer stage of capitalism: from crisis to cure (Second edition, New ed.). London: Pluto Press;.
Wenz, P. S. (2012). Take back the center progressive taxation for a new progressive agenda. Cambridge, Mass.: MIT Press.