fcakp.blogg.se - Flat vs progressive tax

People often think that you can lose money by increasing your income and moving to the next taxation level. Here’s how a progressive system might tax your $50,000: In the United States and most of the Western world, taxes are progressive. I’ll talk about the passages themselves once I clarify the issues. I’m going to start with an overview of taxation. There are a few issues we need to disentangle to consider flat taxes. Middle class people will pay more from a flat tax. That means you jump from no taxes to the highest bracket instantly.

The poorer you are, the more useful an extra dollar is.

It’s a myth that you pay more on your existing income by moving to a higher tax bracket.

High income earners usually end up paying about as much under a flat tax. Also, normal tax systems have deductions.

But flat taxes can have thresholds below which no taxes are paid.

Some believe that flat taxes will tax the rich less than our current progressive systems do.

A flat tax with no deductions seems to work in Estonia.

This section has paragraph summaries and an analysis of the passage, links to the explanations for the questions are below. The second passage argues that progressive taxes are better than flat taxes, because flat taxes are unfair. The first passage discusses the advantages of having a flat tax. This is an explanation for passage 4 of LSAT preptest 72, the June 2014 LSAT – the comparative passage.