It is a highly debatable issue of who pays the most tax, but such debates usually don’t interpret or confuse the facts leading to varied results. Let us look at some of the taxes we pay.
What is income tax
Incomes tax makes up most of the revenue for the government. It is a tax levied on wages and salaries earned by individuals either from investments or any other source.
Who Pays the Most Tax
This tax makes up most of the federal revenues and is cut from wages paycheck. Most of this revenue is spent on medicare and unemployment benefits.
It is an indirect tax that is levied on the purchase of specific goods like alcohol and gasoline.
Imposed on the import of certain products.
Although tax-paying composition depends largely on people’s income, people who earn more have to pay tax more than those who earn less.
Progressive VS Regressive Tax
A progressive tax means those who earn more have to pay more tax than those who earn less. This includes income tax, estate taxes, and earned income tax credits.
Progressive tax ensures a distribution of the money properly. Since the government will take money from the rich and spend it on poor people, it also makes a country more prosperous. They improve the poor people’s ability to buy products that they can not afford to purchase and provide them with health insurance to ensure that they get treated fairly.
A regressive tax is the opposite of a progressive tax. It takes tax from everyone regardless of their income. This is thought to be problematic for people with lower income since it puts a lot of pressure on them to pay equal taxes. It includes property tax, sales tax, and excise tax.
Taxes are a necessity to make a country run smoothly and effectively. However, the distribution of taxes should be done relatively to give benefit to everyone.