Introduction
Income taxation plays a crucial role in a country’s financial system, serving as a method of revenue and a system for achieving economic objectives. The form of income tax systems can be widely diverse, but the main debate focuses on whether taxes should be demanded at a flat rate or progressively based on income. As it turns out, such taxing policies offer many benefits for improving the standard of living for all citizens. There are several reasons that can prove it, such as fairness and equity, income inequality reduction, and encouraging social responsibility, among others.
Benefits of Progressive Income Taxation
Firstly, a progressive income tax system is naturally fair and equitable. It makes sure that people with higher wages spend a major part of their earnings, thus reducing the burden on those with lower incomes (Gerber et al., 2020). This approach aligns with the principle in which individuals are taxed according to their financial capacities. This fairness promotes social union and enhances the standard of living for lower-income individuals.
Secondly, another one of the strongest arguments to support progressive income taxation is its effectiveness in reducing perceptive inequality in revenue. Progressive tax rates redistribute money from top to bottom, contributing to a more even distribution of resources (Chen, 2020). This reduced income imbalance can cause better access to basic needs, education, or even increased social mobility, eventually raising the living standards for everyone in society.
Last but not least, this progressive income tax system enhances a sense of social responsibility among those consistently earning higher wages. When they see their tax money used to improve the standard of living for every citizen, it can encourage them to evoke and spread volunteerism and a commitment to social issues (Gerber et al., 2020). This sense of responsibility promotes social cooperation and contributes to the well-being of the whole population.
Conclusion
To summarize, as can be seen, there are several arguments for how useful the progressive taxation system actually is. They include a shared feeling of fairness, decreased income disproportion, and social responsibility, among others. Countries can construct a more equal and thriving population, where all groups have the just opportunity to feel a higher standard of living and quality of life if they adopt such progressive taxation policies.
References
Chen, S. H. (2020). Inequality-growth nexus under progressive income taxation. Journal of Macroeconomics, 65. Web.
Gerber, C., Klemm, A., Liu, L., & Mylonas, V. (2020). Income tax progressivity: trends and implications. Oxford Bulletin of Economics and Statistics, 82(2), 365-386. Web.