Question

Ethics in Business and Accounting Question

One main key concept that was brought in chapter three up was "progressivity" of taxes meaning that the higher your income bracket is the more you should pay in taxes. Based on the concepts of economic distribution discussed in the chapter do you believe people with higher incomes should pay a higher tax rate to pay their fair share to society?

Answer 1

SOLUTION

Progressie tax rate system is system in which higher income individuals  will be charged tax at  higher rates whereas individuals having lower income shall be charged at lower rates . Where as under flat rate system every one have to pay tax at same rate .

Progressive system can be claimed as fairest because higher income individual pays higher tax and it reduces the tax burden of poor or less earning individuals . As poor have less income they need more money on their basic suvival needs like housing , food etc this system impose less tax and hence allowing them to keep more money with them . Individuals with higher income have more money left after their basic survival need thus they are capable to pay more tax and help in maintaining a balanced society .

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