I've had this discussion about flat rate taxation with several people before. The trend is like this, the rich favors the flat tax rate. the poor do not.
i knew someone from a "poor" country remark to me that a flat rate taxation creates more social problems.
My proposal is for a flat rate tax above a threshold. It is simple and is deducted at source. It should be paid by the employer as part of the cost of employment. (Of course, the employer will adjust the salary accordingly). However, it will be subject to a minimum wage.
The high income earners are able to benefit from tax loopholes in the existing system. They are able to engage tax accountants to help them to reduce their tax.
With a complicated progressive tax system, with various kinds of incentives and reliefs, many high income earners do not really pay that much tax.
GST is like a flat rate tax, as it has to be paid by all workers regardless of income level. In fact, GST represents a higher proportion of the income of low wage earners, so it is regressive. A flat rate tax to replace GST is a better approach.
I've had this discussion about flat rate taxation with several people before. The trend is like this, the rich favors the flat tax rate. the poor do not.
ReplyDeletei knew someone from a "poor" country remark to me that a flat rate taxation creates more social problems.
what do you think?
My proposal is for a flat rate tax above a threshold. It is simple and is deducted at source. It should be paid by the employer as part of the cost of employment. (Of course, the employer will adjust the salary accordingly). However, it will be subject to a minimum wage.
ReplyDeleteThe high income earners are able to benefit from tax loopholes in the existing system. They are able to engage tax accountants to help them to reduce their tax.
With a complicated progressive tax system, with various kinds of incentives and reliefs, many high income earners do not really pay that much tax.
GST is like a flat rate tax, as it has to be paid by all workers regardless of income level. In fact, GST represents a higher proportion of the income of low wage earners, so it is regressive. A flat rate tax to replace GST is a better approach.
ReplyDeleteI do agree with your points. we do need a system where the tax is simplified.
ReplyDeletethe rich prefers a flat tax rate is..when they say this
"why should i pay more tax, just because i work harder to earn more money?"
no kidding, i have had ppl say this. if you have flat tax rate above a certain threshold, where would you think that level should be at?