What’s The Difference Between Progressive And Regressive Taxes?
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- čas přidán 20. 12. 2018
- Progressive taxes tax the wealthy more than the poor. Regressive taxes tax the poor more than the wealthy. A third type of tax, proportional, attempts to tax everyone at the same rate. This video discusses the differences in an attempt to educate people on the pros and cons of each type of tax system.
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Love the quick clarification at the beginning
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watching this in online class
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Totally agree.
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Thank you for the great explanation. Can I use your video explanation to the class presentation?
So what we have is both progressive and regressive tax system here in America
wish we had flat tax
@@swerth9811
Progresseive it’s better
thank you
Best..👌
Flat tax is still not fair because the person working harder is still having to pay more out-of-pocket
Is sales tax regressive
Yes. It's a regressive tax
I disagree with the perception that it is : if we create a tax where non essentials are not taxed then it is your choice whether to buy the taxed items : the poor are not automatically taxed more under that system
Fair is a subjective term. Applying it to a tax system is misleading.
Thank you sir
Basically, regressive taxes means poor will become more poor, and rich will become more rich
In progressive taxes. You're taxed more for working harder
Proportion taxes treats everyone with the same percentage fair and square
I'd have to say proportion tax is the best.
Nah, the progressive tax is much better, proportion tax is not ideal as 10 percent of income of low-income family is not the same as 10 percent of income for high-income family as the price of goods is not tied to their income, meaning that bread costs the same for poor people and rich people, if it the cost of basic goods were tied to your income, then maybe flat tax would work, buit they're not.
And you should never equate hard work with wealth, quite often they're opposite.
Progressive Tax to people who go from rags to riches is basically a tax on success. It almost discourages people from becoming more wealthy. I'm with the Flat tax indeed.
@@jamesgavin6171no one is actually discouraged from working harder to earn more because of higher taxes. Anyone who is at 40k or less wouldn’t work less hard to get to 400k due to higher taxes, because they’d be making so much more they’d be far better off.
Proportional taxes just take more money away from the poor.
It's "fair" in theory, until you realize that capitalism is inherently unfairly tilted towards the wealthy, who have the opportunity and capital to create more wealth for themselves. So there's little reason to worry whether or not taxation is fair.
Somehow, despite the progressive income tax code of the United States, the wealthiest Americans keep getting wealthier, and the poor keep getting poorer.
@Thien Nhat La A 1% increase in income will not increase your taxes from 10-15%.
If you make 40k and pay 10% of that in taxes that’s 4K right? Then next year you earn 41k. Only that additional 1k would be taxed at 15%. So you would pay 4K for the initial 40k, and 150 for the 1k. So $4150. You would still be earning an additional $850 for that year. If it had stayed at 10% above 40 k you would pay $4100. So only a $50 difference…. You don’t “jump” into a new bracket and pay 15% for everything you earned.
Firstly, this was a very good explanation. I really like the video.
Secondly, a big problem is that flat (proportional) taxes are *also regressive* . If the Browns pay 15% of their income, they don't have the $36k required for living. But the Smiths, paying 15%, still have plenty more than $36k needed for their living expenses. The rental cost of a home doesn't scale with income, it simply *is* . The cost of transportation also doesn't scale with income. Nor does the cost of a dozen eggs or a loaf of bread. When looking at absolute dollar amounts, flat taxes are inherently regressive.
I'm in favor of the flat tax. I was born into poverty, lived in poverty until I got out on my own, went in the military, got the education and the skills to get a better paying job. My strive to be the best and move up should not be penalized. For the people who want and want without working for it, is what I have a problem with. I pulled myself out, you can too!
If we all benefit from the same public services and goods, why are proportional and progressive tax systems cherished and deemed "fair" while regressive tax is classified as "unfair" ? When you go to the supermarket to buy a pack of eggs which costs $10, every person, regardless of their income pay the same amount of money for that pack of eggs. If John makes $100k in income and Mary makes $300k in income, you don't expect Mary to pay 2 times more for the same pack of eggs, so why then do not apply the same logic to taxes?
Assuming a flat tax rate of 20%, if we all benefit from the same public services and goods, then why John pays $20k in taxes while Mary pays $60k in taxes? Mary pays an excess of $40k the THE SAME public services and goods, just because she has a higher salary. Practically she is penalized for being a higher earner. It doesn't make any sense.
In the video the fairness is invoked in relation to "tax burden" where the tax burden is represented by a percentage and not by an actual amount of money. By the same logic you could say that Mary, because she earns 3 times more than John, has an unfair larger income, so by that logic to make it fair Mary would have to give half of the difference between her salary and John's to John so that they could both "earn" $200k.
There are problems with this article but I will identify just one. Stating that sales taxes are regressive is false. The claim is based upon the assumption that the tax consumes more of the disposable income of low income people. I agree with that assumption, but by that logic all taxes are regressive. What is disturbing is seeing how math is misused to make it look like low income people are taxed more. The truth is much simpler. People with more money spend more money. With a fair sales tax, the more you spend the more you pay, so wealthier people pay more.
Also I have yet to find a valid answer for why a low income person ( removing age restricted, disabled, etc.) could not earn more income.
The richest Americans would love a flat tax. That's all you need to know about it.
...GST be like
this is nonsense. And this is why socialism sucks. Why do you assume that on 2:59 rich family should spend same $36k a month as their poor family friends? What if they wan to spend $360k on purchases and thus, pay $18k in sale taxes? Then it will be exactly same tax rate (4.5%) if you insist to calculate it relatively to their income. Who the hell decided to compare these families and say that if poor ones live on $36k then rich will have to live off same amount of money??.. This is where you are wrong - you can not calculate sale tax relatively to income, this is total BS. It is calculated relatively to the amount of products you purchase. And this is flat rate. The less you eat, the less you pay. What the hell do you normalize everything to the income?
Spot on !
You left out one of the biggest regressive taxes, corporate taxes.
Flat tax is actually a regressive tax