Question

Does a fair tax exist? Would you rather pay a tax directly or indirectly? Is a progressive tax better than a proportional tax? What is your opinion?

Answer 1

I don't think that there is an existence of fair tax because there is different tax regimes all across the world as they are trying to fix their accountability of tax on the basis of of demographic structure of the countries and they are also trying to fix that tax according to Income generation of different individuals so it can be said that the tax structure are highly flexible in nature but they are not completely efficient and it is not accurate to say that there is a fair tax structure Universally present because it will always be subject to debate.

I would always be wanting to pay taxes directly then indirectly because it will help me in fixing my responsibility directly and it will also help in in getting the tax refund directly so this is a more transparent type of taxation rather than indirect taxation which is involving one person's liability based upon the another.

Progressive tax is a tax in which the tax rate increase at the taxable base amount increases so the average tax rate will always be lower than the marginal tax rate.

Proportional tax is a tax imposed in a manner that the tax rate is a fixed with no change in the taxable base even if it is increasing or decreasing so the average rate of taxation will always be equal to the marginal rate of taxation.

I think the progressive tax rate is better because those people who have the higher rate of income should always be made responsible to pay the higher tax because they are trying to generate a higher benefit out of the economy so they should be made responsible to pay higher taxes and they should be subjected to to a higher amount of tax as they are generating the maximum benefit out of the economy. It will also be helpful in maintaining a concept of equity throughout various income groups.