1. Progressive taxation is the means of taxing the general populous of wage earners by the amount of income they earn on annual basis. The more money an individual earns in a given year, the more he/she will pay taxes compared to an individual who does not earn as much in a given year. The amount of taxes paid within a progressive taxation society is defined within a range that depends upon the yearly income, marital status, and whether or not an individual is a Head of the Household.
We should be concerned with the regressive effect on taxpayers because individuals who earn a lower income are taxed at a higher rate than individuals who earn a higher income. In this way, the rich get richer and the poorer get poorer. The result would be a higher disparity among the wage earners in the society.
2. As a society, we should be concerned with the disparity of wage earners and the distribution of income as to prevent the rich from becoming richer and the poor from becoming the poorer. The rich will become more concentrated at the expense of the middle and lower class, which can lead to political and social corruption. Hence, lobbying by the rich can result in inefficient distribution of income and adversely affect public and private investments.
3. Lowering taxes may lead to increased economic activity, growth, employment, and higher tax revenues for the government in the short run. However, there are implications that will need to evaluated and assessed regarding the budget spending and saving on the part of the government in the long run. For example, lowering taxes to inject life into the economy will have the effect of creating a budget deficit, if successful. This means that the government spends more money in investments than it receives in tax revenues. Adjusting the tax rate is only one variable that affects economic activity and growth, employment, and tax revenues. Government spending is also a factor that weighs in on...