Question

Write 50 words words explaining should income taxes be “Progessive” or “Proportional” and why?

Answer 1

Before going to the discussion that should there be a "Progressive Income Tax" or "Proportional Income tax" we should know the Terms exactly what they mean and probably give and idea of certain thing.

Progressive Income Tax - Progressive Income Tax is a format of taxation where the taxes are applicable to the amount coming under the purview of tax according to the individuals Income. That means The person under Higher Income group will have to pay More tax in comparison to the lower Income group. There are different tax rate slabs according to the income group representation. The increase in wealth directly increases the tax liability, the tax slab is applicable to the amount that is under Tax purview. For Example - India and U.S. have Progressive Income tax procedure.

Proportional Income Tax - Proportional Income tax is a format where a flat rate of tax is applicable to all the residents of the country respective of whatever income group they belong to. That means The Higher income group will pay the same tax Rate that is being paid by Lower income group. It doesn't change with the increase or decrease in the income.

In my Opinion Income tax should be Progressive Income Tax as the matter of fact that the gap between the Higher Income Group and Lower Income group is more. If a person belonging to Higher income group pays higher rate of tax it will not affect the disposable income rather than a lower Income group paying high tax will reduce the disposable income left for them for meeting up their monthly or yearly expenses. Further more it Reduces the Disparity between the High Income Group and The Low Income Group. As the motive of Taxation is to accumulate a fund/ contribution of the earning people of the country for the development purpose of the Nation. Infrastructural Development, Medical and health care development, Schooling Colleges etc.