![]() Under a progressive tax system, the more you earn, the higher the rate you pay. Progressive taxes are more advantageous for lower-income individuals. Here are the main characteristics of each system, along with brief descriptions as to why each may be seen as either a pro or a con: flat taxes isn’t likely to end, as what some view as a pro for a certain system is seen as a con by those on the other side of the argument. ![]() Story continues Pros and Cons of Using Tax Brackets Under a strict flat tax system, no deductions or credits are allowed. ![]() For example, under a 24% flat tax system, all Americans will pay 24% on all of their income, no matter how much or how little they earn. Take Our Poll: How Do You Think the Economy Will Perform in 2023? Flat Tax ScheduleĪs the name suggests, under a flat tax system, everyone pays the same rate on all of their income. The net effect of all these is that about 40% of Americans are projected to pay no federal income tax at all for tax year 2022. ![]() Under a progressive tax system, various deductions or credits are allowed that can reduce the amount of tax that someone ultimately pays. At the top of the tax bracket range, those with taxable income over $539,900 ($647,850 for joint filers) will pay a 37% tax on each extra dollar of income that they earn above those levels. Everyone pays 10% tax on their first $10,275 of income ($20,550 for joint filers). For tax year 2022 (2023 filers), there are seven tax brackets, ranging from 10% to 37%. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |