Advantages Of Regressive Tax

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Regressive tax is a tax that is applied uniformly, yet takes a larger percentage of low-income individual 's income and lower percentage of individuals with higher income. Taxes that are regressive include taxes such as gasoline tax and sales tax applied to essentials. If sales tax is a uniform 7% individuals with less income spend a higher percentage of their total income on the tax than individuals with a higher income. Progressive tax is the opposite of the regressive tax. Progressive tax is income tax that takes a higher percentage of the overall income from individuals with high-income than low-income individuals. Progressive tax is used to fund social welfare programs that provide assistance to low-income individuals to assist with meeting …show more content…

The progressive tax strategy makes sense. It would not make a lot of sense to have low-income individuals paying the same amount of taxes that higher-income individuals do to fund safety nets that many of those same low-income individuals use to meet their basic needs. Higher taxes on low-income families would in turn cause the low-income families to need to use more safety net programs. It is easy to see how the regressive tax strategy makes it difficult on low-income individuals to due to a higher percent of their income being used to pay things such as sales tax. There does not appear to be a way around this due to everyone in every stated being expected to pay the same rate of sales tax. The general tax revenue is needed to provide states and local governments to provide all the services that the residence need, use, and expect. It is not unusual to hear individuals complain that their property taxes increased to provide funding for local schools or funds to improve the road ways. If the local government did not provide free public education or improve the road ways individuals would be upset to lose the services that they are accustomed to …show more content…

There is a fear that after the baby boomers receive their social security there will not be enough social security funds to pay the following generations. The extremely high increase in medical care is also impacting the Medicaid and Medicare funds. There needs to be a focus on reducing the cost of medical care in the United States. It comes down to the prices of everything is increasing causing the cost of all the programs to increase using funds more rapidly than the taxes can cover. In addition to price increases, the population is also increasing. With more individuals and families using these programs there is a need for increased funding that tax payers do not typically want to pay. A closer examination of the Indiana TANF program reveals that a family of 4 with absolutely no other income is provided with $315 a month for children and $346 a month for the parent or caretaker. I can’t imagine having to pay the bills and provide for a family of 4 on a monthly income of $661 (State of Indiana, 2015). Is a family of 4 honestly able to meet the basic needs of shelter, clothing, and heat on an income this low? Should higher-income individuals contribute by paying higher taxes? I would say that the TANF program should decrease the 60 month time limit that families can

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