Is progressive taxation fair?

Written by russell huebsch
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When talking about who should pay what in a tax system no side ever seems satisfied. The United States tax system has come under fire during the last two decades for alleged "unfairness" in the system. The rich claim they pay too much, as do the middle and lower classes. Is the progressive tax system fair, and might there be a more unbiased approach to the tax system?

Types of Taxation

There three types of taxes: progressive, regressive and flat. A progressive tax scheme charges very small amounts to the poor and then the tax rate gets much larger from middle class to upper class brackets. A regressive tax reverses this order, and a flat rate charges all socioeconomic classes the same percentage.


For over 100 years after the end of the Revolutionary War, the United States had no income tax, save for a brief period during the Civil War. The U.S. paid for government services with excise taxes, taxes on specific products, and high tariffs. Excise and import taxes not only hurt the economy, but the government still could not raise enough money, and thus in 1916 an amendment to the Constitution was added that instituted a progressive tax on income.

Argument Against

The 1980s saw a revival against the progressive tax system the U.S. had instituted since the early 20th century. Then President Ronald Reagan slashed taxes for the wealthy, a theory somewhat pejoratively called "Reaganomics." The assumption was that since the rich were the ones most likely to start businesses and invest, if they had more money the rich would invest more and create jobs.

Argument For

The U.S. and many other capitalist countries institute a progressive tax due to the nature of income inequality that usually happens in a system of winners and losers. To prevent the rich from becoming too wealthy and owning too much in the system a progressive tax redistributes wealth to prevent this income gap. A progressive tax system also believes that the rich should pay more because they tend to have more sway in the political system than the poor, and should thus pay for this privilege.

Alternatives To Progressive/Regressive

The argument over the proper way to distribute income tax has a third solution -- get rid of progressive/regressive taxes and charge everyone the same rate. Advocates of this type of system claim that no other tax system can every be truly fair due to "gaming" of the system. The flat tax substitutes the hundreds of IRS forms for two, one for personal income and one for business income.

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