Title: What Are the Pros & Cons of a Progressive Tax? | Pocketsense
Headings: What Are the Pros & Cons of a Progressive Tax?
What Are the Pros & Cons of a Progressive Tax?
Redistribution
Anti-Innovation
Safety Net
Fairness and Transparency
Alternatives to the Progressive Income Tax Model

Content: In 2012, single American taxpayers earning between $0 and $8,700 paid 10 percent of their earnings in federal income taxes, while those fortunate enough to earn over $388,350 had to hand over 35 percent of their income. Some people would like to see the country's tax regime become even more progressive by increasing the amount the rich have to pay, while others support the introduction of a system of flat taxation in which all taxpayers would pay a the same rate, regardless of income. There are also tax reformers who argue the country should do away with income tax entirely and switch to a model of taxation based on consumption. Redistribution
Proponents of progressive income taxation systems argue that they ensure that those with the broadest shoulders bear the greatest burden. Flat-tax regimes result in those on lower incomes losing a greater proportion of their disposable income, due in part to the fact that they have to pay the same regressive taxes as the rich on the goods and services they buy. In a progressive system, taxes are collected from higher earners and money redistributed to those further down the income scale through social security benefits and government spending on public services such as schools and hospitals. Anti-Innovation
Opponents of progressive income tax systems claim that they stifle innovation and encourage high-worth individuals to hide their money offshore or leave the country in search of more lenient tax regimes. The argument goes that high earners will be discouraged from making more money or decide to hide some of their income if they're forced to hand more of it over to the Internal Revenue Service. Supporters of a flat tax point to evidence that tax receipts from the rich rise when the rate they're asked to pay goes down. When the top rate of tax was slashed from 73 percent to 25 percent in the 1920s, the share of taxes paid by those who made more than $100,000 a year -- more than $1 million in today's money -- increased from 28 percent to 51 percent, according to The Wall Street Journal.