There are many types of taxes that can be found today. Some of these taxes are a group of people who pay more, while others may all pay the same regardless of income. Three types of taxes, we will discuss the progressive tax system of proportional tax system, a regressive tax system.
Progressive system is a system where people with higher incomes will pay lower income people. An example of a progressive tax is a tax on income. With rising incomes, the rate increases. Some argue that the progressive tax is fair because those with higher incomes will pay more than low-income person. The drawback is progressive, people with higher incomes will challenge the fairness of the system.
Proportional representation system is a system where everyone pays the same rate regardless of income. An example of the sales tax is proportional. Regardless of how much income you make, you will be subject to the same rate as others. It is argued that the tax favors the rich because they spend less of their income. The advantage is that it is very easy to calculate.
Regressive system is a system in which tax cuts as income rises about. This tax is often associated with consumer goods like food. Everyone must buy food. The more money you make, the less you will have an impact on taxes because it is a minor part of their income. Regressive taxes hurt people whose income is low because it represents an increasing share of their income.
