Tax & Fairness

Taxation: A Legal Pickpocketing

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The link directs you to the articles written about how taxation and fairness are related to each other and introduces the examples from Australia and United States. The whole 2000 word writing is basically about “the fairness of different amount of taxes being paid by different groups of people.”

If there were to be fixed taxation, the group with low income will have great burden compared to the high income group. So, most of the countries employ progressive, regressive, or proportional taxation to make things ‘fair’ for everyone. In order for the government to be ‘fair’ the government have to ‘unequal.’

The diagram comparing Progressive, Proportional, Regressive Taxation According to the Income.

Progressive taxation basically means higher tax burden on high income group and lower tax burden on low income group. It is ‘unequal’ as high income group must pay more than anyone else, however, many rightest-minded people claim that this is ‘fair’ for the low income group.

Regressive taxation means less taxation burden on high income group, but a higher taxation burden on low income group. The money the government get out of the high income group will be larger than the money from the low income group. However, the percentage income on the lower income group will be higher than the high income group.

Proportional taxation might be the fairest taxation method in my opinion. It taxes everyone according to the taxation percentage. If a government wants to get tax moneys off the tax payers, the government will set a percentage of, let’s say, 5% off the income, the percentage will be applied to all income group. However, there is one drawback to this method. Let’s say that $2000 is the minimum amount of money required to consume necessities such as rice, bread, and ecetera in a year. The people earning below $2000 a year will have difficult time if they were to be taxed, even in a ‘fair’ way.

To protect these people, I believe that some governments are implementing the taxation method hybridizing two kinds of taxation methods. For example, the government can exempt taxation on the money required for people to consume the necessities. And tax on the disposable income.

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