![]() ![]() If the assumption holds, higher tax revenue will be generated relative to a flat tax regime.Ī. ![]() However, a tax is a disincentive to work (Meade, 2013, p.38).Therefore, it will result in less income on aggregate. Thesis Statement: Progressive tax results in higher revenues because people with higher income are taxed at a higher tax rate generating higher tax revenue. Area of Focus: Countries with progressive and flat tax system Current Problem: Comparing revenue generation among countries using progressive and flat tax systems. Progressive tax results in higher revenues because people with higher income are taxed at a higher tax rate generating higher tax revenue.Ī. The tax system adopted in a country depends on set objectives, its impacts on taxpayers, and the desired effects on the performance of the economy. The regressive system involves decreasing tax as income increases while the flat tax is a system where everyone pays the same tax irrespective of the income (Roach, 2003). The progressive tax system entails increasing taxes with an increase in individual or household income. Based on the method of collection, a tax system can be flat, regressive or progressive. Tax forms one of the major sources of government revenue it contributes to economic growth and development as well as the overall prosperity of a country. ![]()
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