FLAT TAX
"A flat tax (short for flat tax rate) is a tax system with a constant marginal rate, usually applied to individual or corporate income."
Pro: "Only a person's wage income would be taxed, so investment income, such as capital gains, dividends and interest, would be tax free." This would make taxes so much easier and much more simple each year. There would be no exemptions or deductions granted except to the lowest incomes so all of the loopholes in tax codes would be eliminated. The flat tax would eliminate global taxation and would allow the U.S. to compete more evenly in global markets. Basically the who theme of flat taxes in that they are fair and simple. Just like that.
Cons: It is believed that flat taxing is penalizing the low-income citizens. With the rates being the same, it is obvious that taxing 10% of a high income would affect the citizens much less than a 10% on a lower income. "Low-income individuals and families must spend money on the same necessities required by higher-income people. However, after the necessities are purchased, the poorer taxpayers, because they earn less, will have less money left over to pay taxes, at the same rate as those earning higher income amounts."
National Sales tax:
Pros: A sales tax could increase worker productivity. Also, having a national sales tax would eliminate the need for IRS by getting rid of the need for federal income. "Currently, we have an income tax that gets progressively more burdensome the more money you make. This reduces the incentive to work harder and be productive the higher you move up the ladder. Taxing consumption makes a lot more sense than taxing production." (geekpolitics.come) Another positive look is that illegal aliens and people who normally escape taxes would then be taxed as well, making it fair for everyone.
Cons: The biggest argument against a national sales tax is that it would be "regressive," meaning it would place a heavier burden on poor people.The entire tax industry would be destroyed, and thousands of accountants, IRS workers and other people in the tax business would lose their jobs. "A national sales tax is essentially a tax on consumption. Since low income families spend almost every penny they earn on subsistence items, they would pay a higher percentage of their earnings in taxes. Higher income families could afford to put a portion of their earnings into savings investments."
Overall i think national sales tax is one of the best options. It isnt my favorite, but its fair and its a close second.
Progressive:
Progressive tax levies a higher tax rate on those earning larger amounts of money than on those who earn less money. Your income determines which tax bracket you qualify for, and the wealthier members of society bear more of the overall tax burden than the poorer citizens. Progressive taxation helps protect people during a recession because if their income drops, they fall into a lower tax bracket. This means they will owe less money to the government. A highly progressive taxation system may discourage people from entering high-paying professions because so much of their potential income would be taken away in taxes.
Cons: Many people who do not favor progressive taxation argue that taxing one group at a greater rate than another group does not constitute strictly equal treatment. It encourages the wealthier citizens to find loopholes and cheat the system. Many critics also argue that the system is far too complicated.
Vat (Valued Added Tax):
Pros: The largest benefit of any new taxes would be an increase in federal revenue. Currently, only state and local government agencies charge taxes on purchases, but by instituting a VAT the federal government could benefit from consumer spending as well. Supporters of a VAT suggest that it would make taxes more efficient and easier for taxpayers to understand."Online stores such as Amazon.com, often get out of charging consumers sales taxes because of a 1992 Supreme Court ruling that retailers must have a physical presence in the state to collect excise taxes. However, some experts claim that a VAT could solve this problem of lost online sales taxes by levying taxes on all sales, even online sales."
Cons: Compared to our current tax system a VAT would be considered significantly regressive, meaning they benefit higher income taxpayers more so than those living closer to poverty. Additionally, the change from our current tax system to one with a VAT would be very difficult and time consuming, with lots of opportunities for fraud.
From what i'm getting out of the articles, the Value Added Tax provides too many opportunities for loopholes and those who obey the law pay more than necessary.
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