Advantages And Disadvantages Of Progressive Tax

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Many economists agree that a tax may be considered as a financial charge that includes a transfer of resources from the private to the public sector and this act of nonpaying transfers is punished by law. History has shown that taxes are not an invention of the modern era. They have been used many centuries ago for different purposes that were related mostly with public works, economic infrastructures etc. In our days the taxes are levied in money or its labor equivalent. in the countries that came from a communist regime ,firstly was implemented a tax system based on the progressive tax. this was a system that was used widely by the western countries. The problem was that the result of this new tax implementation wasn't what the governments and economists expected. The economic condition of the post communist countries differed a lot from the civilized western countries. For this reason some of this countries since 1994 implemented the flat taxes as a new mean for encourage the economic growth. What it should be emphasized is that the tax system is an issue that always generate debated. There are a lot of arguments pro and cons the different taxes that are raised from the interested parties. These research paper will give a general view of what are the advantaged and disadvantages of flat tax and progressive tax.

The flat tax is implemented in Albania in 2007 and its result were felt immediately in the economic growth of the next year . According to the chairman of European for tax reform , GUNTHER FEHLINGER this reform has been proven to be successful so it should not be eliminated or substituted by another tax reform. there are many reason to support the flat tax. firstly the flat tax aims to equalize something that i...

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...ty will also low in some ways the tendency for corruption. So if we take in consideration the faze where Albania is nowadays the change of the tax system will achieve the opposite effects that is expected.

In the other hand we have the progressive system tax. the first rule that every person that is a researcher in the economic field is that the things are not as they seem to be. It is not necessary to be an economic expert to understand if a tax applied over tobacco might impact in reducing the consumption of smoking. According to Admir Ramadani which is an economist the issue of tax system is so complex that it cannot have a definitive conclusion. the best choice to find a solution for the tax system is to achieve the balance between honesty and equity and also efficiency. the progressive tax want a fair distribution of the wealth by increasing the marginal tax.

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