Another disadvantage of proportional taxation is that because rich and poor people are taxed at the same rate, it creates a huge disparity between them, which can lead to resentment, frustration, and, in the worst-case scenario, a revolt by the middle and lower classes against the country's affluent people and government.The most significant disadvantage of proportional taxation is that a large segment of society, namely the middle and lower classes, feel cheated because they believe that those who have more money should pay more tax and those who have less money should pay less tax, but because this system keeps tax rates the same for everyone, there is frustration and anger among the majority of people in the country, as middle- and lower-class people make up 99 percent of the population.Another advantage of proportional tax is that it is simple to understand for both tax authorities and tax payers, resulting in improved implementation by tax authorities and acceptance by taxpayers.ĭisadvantages Disadvantages of Proportional Tax.Another advantage of proportional tax is that it reduces tax evasion by the wealthy because when tax rates are high for the wealthy and low for the middle and poor, the wealthy will try every trick in the book to avoid paying taxes, and thus proportional tax results in less tax leakage from the system.When it comes to taxes, the majority of people do not understand the tax rates because there are many slabs and exemptions associated with those slabs, so having clarity about the rate of taxation makes life easier for taxpayers.The first and most important advantage of proportional tax is that because everyone pays the same rate of tax, there is no ambiguity about the rate of taxation, which leads to clarity in the minds of both taxpayers and tax collectors.Advantages Advantages of Proportional Tax
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |