Question

In: Economics

13. In detail. a. Wealthy members of the US society are taxed at the highest rates...

13. In detail.

a. Wealthy members of the US society are taxed at the highest rates while a large percentage of non-wealthy Americans pay the lowest taxes and in many cases no taxes at all (see the last portion of the lecture). Explain why or why not you feel this is or is not fair.

b. Explain in detail how you would structure the tax system on wage earners.

Solutions

Expert Solution

In this case, all the members of the US society architect at the highest rates while a large percentage of non-wealthy Americans pay the fewer taxes and in many cases no taxes at all so here why this policy is applicable and why this policy is fruitful for the economy and for the people of United States because there is a very simple reason the wealthy person of the society or able to pay a high tax because the earning and the productivity of the wealthy person is very high so in this particular situation it is good for the government to implement the Welfare policies in the economy by taking taxes as revenue from the side of will the person but when there is a policy of charging low taxes or zero taxes on the non-wealthy person or the to a person of the economy then it is good for the person who belongs to lower class to handle necessity goods and necessities at optimum level and to survive according to their available resources.
B. In my opinion, the tax structure should be progressive it means as the income of the person increases then the tax rate should increase as according to a particular slab and therefore the most important thing is that up to a particular level there must be no tax to a person for example if a person is earning $500 in a month for $1,000 in a month then there should be no tax or very reasonable off with tax on that person but if the person exceeded the limit of $1,000 then the slowly increases up to a particular level. For example, up to $5,000 and after that, there must be another slab of the tax rate $10,000 and as on it will increase up to a particular limit so this is the best policy which followed the policy of equality in the economy under the tax structure.


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