Flat Tax Controversy

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The so-called “flat tax” rate was first introduced in Estonia in 1994, requiring every Estonian citizen to pay 26% of their income to the government no matter how much income they earned. Much controversy transpired in Estonia over flat taxes versus progressive taxes, which is similar to current controversy over the income tax policy in the United States. Much of the controversy comes from the current income tax policy being too complex and creating a substantial divide between high and low income earners . Supporters of progressive taxation believe that heightened tax rates should be placed on high income earners to decrease the weight of taxes on lower income earners and promote equality, whereas opponents of progressive taxes believe that the government should lower tax rates on…show more content…
The federal government collected $865 billion from income taxes in 2009 . This money was allocated toward various government programs, for instance: public schooling, public utilities, and natural gas and petroleum pipelines. Currently, wealthier Americans have a heightened marginal tax rate, but it is not progressive enough. In fact, over the past half century there has been a sharp decrease in top marginal income tax rates. The top marginal income tax rates have ranged from 91% to 28% , and currently sits at 39.6% . It is important to efficiently utilize progressive taxation because income taxes make up 41.5% of the federal government’s revenue . The programs and utilities paid for by taxes benefit everyone, and are vital to many lower income Americans. When taxes become less progressive it benefits high income earners at the expense of lower income earners. Additionally, allowing lower income earners to retain more of their income means that they will have more money to spend in the economy, thus, promoting economic

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