The Pros and Cons of Different Types of Taxes

National Sales Tax

•  Pro

Those who are for this tax argue that it would eliminate, what they claim are, distortions of the current income tax system."It would  get rid of the differential tax treatment of corporate and noncorporate businesses, since under the current system, corporate earnings are taxed twice-once when the corporation taxed on income, and again when dividends are provided to shareholders." In creating the national sales tax, it'll get rid of the IRS and provide an incentive for multinational companies to bring their businesses back to the U.S. 

• Con 

Opponents argue that it would "create a regressive tax system, meaning that low and middle income households along with individuals would pay a much higher percentage of their pay check. "That is because most Americans must spend most or all of their yearly incomes just to make ends meet, opponents claim, whereas wealthier people need spend only part of their incomes, and can save the rest." Many state that the tax would be way higher than 30%, in fact, it would have to be about 60% in order to replace all of the federal taxes with sales tax. Critics point out that it would also mean that home owners wouldn't have to pay a mortgage while those who rent would pay sales tax on rent every single month. Lastly, this change in taxes would put more burden onto to the older people who had already pain income taxes on their pay checks. With this new system, they would have to pay a second, much larger tax on their earnings by being taxed on all goods and services that they bought while they were retired. 

• Sentence: I do not support this tax because it taxes those who already don't have enough and older people.

VAT

• Pro

Those who are for it say that a VAT can help keep corporate tax down. "In Europe, most corporate taxes are well under 30%. While in France--33.33%-- that's still well below the U.S. where, at 39%, it is the second highest (after Japan) of the Orgaanization for Economic Cooperation and Development member countries and more than 10 percent higher than the OECD average." It could also relieve some domestic and corporate taxes with simply replacing or reducing it. A rather small VAT could replace a corporate tax, though it's inadvisable. 

• Con

VAT is a regressive tax, meaning that is unequal and pretty expensive for the low and middle class. "The lower a person's income, the greater the proportion of that income that goes into products and services. The higher one's income, the greater the proportion goes into savings and investments." Another con would be that the VAT system is that is less flexible, while the income tax system can be used to change the economy with consumers, etc. VAT discourages consumption while rewarding investment, which isn't exactly what the economy needs. 

• Sentence: I support this tax more, because it is flexible and can control corporate taxes

Progressive

• Pro

Supporters of the progressive tax system say that the wealthy must pay their fair share in taxes. It is argued that if you have enough money that you can pay higher taxes. "Many supporters argue that the tax system is not as progressive as it should be, with the rich get off relatively easy when it comes to paying their fair share." America is not getting the full advantage of taxing it's wealthier citizens, therefore not recieving advantages that it could get. It slows down the developement of a society if we tax the poor/middle class.

• Con

It is argued that this tax type would burden high income earning households. "The trouble with depending on so few people for so much government is that it doesn't work when the party stops." With the economy the way it is, we are running out of "rich people to tax." Making those who are "the few surviving millionaires" dooms them to fall on the same downfalls that we are going through. Critics point out that taxing the rich to benefit the poor is also an "unjust" practice. To have those people spend their hard earned money on things that don't even relate to them is "unfair" (such as Medicaid, unemployment, etc).

• Sentence: I do not support this tax because it's exploting the upper class and usingf them as a crutch

Flat

• Pro

Supporters of the flat tax say that by avoiding double taxation, it would provide a greater incentive to invest which would spark high economic growth. Americans would understand  that these taxes would be better in the long run. "There will be an explosion of new investment, new business, and new jobs (that) would transform the economic and social landscape of out country."

• Con

"Opponents of flat-tax proposals say that they abandone the governments  responsibilty to lessen deep disparities." Majority of economists believe that a flat tax that does not have any deductions for mortgages will ultimately raise the average taxes for many if not all of the poor/middle class families. Many supporters are, assumed, to be weathy Americans in which this tax would mot effect.

• Sentence: I do not support this tax because all it will do it raise taxes and make more lower class families poorer.