Governments under such a system are also far more able to implement wealth distribution measures and can supply tax credits to promote beneficial behavior (e.g. flat tax system.Ī progressive tax system typically has numerous write-offs for individual taxpayers, allowing them to effectively save money. However, there are more distinctions one should consider when comparing a progressive vs. Flat Tax: What’s the Difference?Īs stated above, a progressive tax system involves tax brackets based upon income, while a flat tax doesn’t. It is also worth noting that the evidence behind the flat tax promoting economic growth is disputed. It can cause the national debt to increase sharply.
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