Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and beginning April 20th, 2021 (Eastern Time) the Yahoo Answers website will be in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.

What is fair about proportional tax?

Most income tax systems work off proportional tax. The higher your annual salary, the higher percentage of tax you pay. Most people think this is fair because most people earn very little.

On the other hand, if you are earning a really good salary, you might not think it's fair. Why should you pay 50% of your income in tax? For every dollar you earn you only get to keep 50 cents. It provides a disincentive to earn more and to continue to stimulate the economy.

Put simply, if a couple goes to college, studies hard, works 12 hour days, puts off having children until they can afford them, earns $250,000 / year and pays $125,000 in tax, and the government gives that tax money to welfare mothers and pensioners who never saved for their own retirement, what's fair about that?

Update:

No need to get so angry, mate.

Neither of my grandfathers finished high school, but they made sure that all six of their children went to inexpensive colleges and got their degrees.

I am all FOR taking care of people who have had bad luck, injury, ill health, and especially the children and disabled affected by these things.

My question remains: why should those high earners who've jumped through all the hoops disproportionately support those who dropped out of school, got pregnant too early, gambled, drank and drugged their money away, and didn't think at all about their futures?

3 Answers

Relevance
  • meg
    Lv 7
    1 decade ago
    Favorite Answer

    The country you live in to a large extent determines your income. that is it is very hard to make $250,000 a year if you live in a poor country even if you work hard and go to college, so it is reasonable to argue the high income people are gaining more from being a citizen. There is also the practical matter that the top 20% of income earners get over half the income so if they did not pay at least half the tax our government would be funded at a much lower level. Retirement benifits are based on the amount of money they paid into the system not income taxes and welfare mothers are only a couple percent of the budget. People earning $250,000 a year pay $50,000 in federal taxes not $125.000 see the effect of taxes on peoples income in the US see

    http://www.visualizingeconomics.com/2008/03/16/ave...

  • Che
    Lv 5
    1 decade ago

    Nobody ever said it was fair to have a proportional tax system just progressive. Economists say it's actually better for the economy because consumption falls as incomes rise so taxing the poor less raises consumption. The rich also have a greater interest at stake in the maintenance of most civil institutions like the police because they have more to lose. There's also the ole' level the playing field argument. If you wanted a fair tax you'd do like mike huckabee and institute a sales tax to replace income taxes. That would be regressive though because it wouldn't hurt a millionaire nearly as much as a middle class individual. Most progressive tax systems are carefully devised to prevent disincentivizing growth in income. Such as the welfare trap where people lose free money by getting jobs so they just don't. It's still always worth someones' while to make more and pay higher taxes.

  • Anonymous
    1 decade ago

    So, the welfare mothers and the pensioners are at fault for their own poverty? Maybe some are, but to categorize them all as such is irresponsible and false. Societies have a moral obligation to take care of those who, through no fault of their own, cannot take care of themselves. Not everyone is able to go to college to get those good jobs. Look at the cost of college and how that excludes so many people. Then think about how many people are in the category of the "working poor". Good honest people who can barely make ends meet and who can't scrape together enough to fund a cushy IRA or 401k. Consider that there are countries where everyone pays a flat tax (that has been proposed in the US but will never happen). For instance, Denmark has a flat 50% rate so even fewer people have a chance to get rich. The upside is that everyone is taken care of, including free college, from birth to death. You decide what is fair.

Still have questions? Get your answers by asking now.