A 3 page research paper that describes the current system, the progressive tax, and then describes the two most prominent alternative proposals, which are the flat tax or a national sales tax, which is also known as the FairTax. Bibliography lists 3 sources.
For example, if the family income is $20,000 annually, a 20 percent tax rate might apply, while couples earning over $200,000 pay 30 percent of this income in taxes (Siemond).
However, there is broad agreement that the current system is convoluted and flawed that it actually thwarts the nations prosperity and growth (Mitchell). Two major tax reform initiatives have been
proposed to remedy this situation: a flat tax system and a national sales tax, which is also known as the Fair Tax. Rather than the employing the 893 tax
form that are required by the progressive tax system, a flat tax system would utilize just two simple, short forms: one to apply to income from labor and the other
to income derived from business and capital income (Mitchell). All taxpayers would pay a straight percentage of their income in taxes, which would be less than 20 percent (Mitchell). While
there have been various flat-tax proposals formulated over the last several decades, all proposals contain this distinguishing factor. Flat tax proposals also eliminate tax credits, as well as deductions, as
well as all loopholes, which means that this proposal eliminates complexity, making it possible for all taxpayers to file their taxes using one, postcard-size form (Mitchell). A flat tax
system would benefit families, as the only exemption included in the system would be one based on the size of the family. For example, the income for a family
of four would be tax-exempt until annual income reached $30,000 (Mitchell). A flat tax would also eliminate the disincentives to capital formation by eliminating double taxation on income that is
saved and invested (Mitchell). In other words, "no death tax, no capital gains tax, no double taxation of saving and no double tax on dividends" (Mitchell). Furthermore, a flat tax