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5.1 Flat Tax & Political Philosophy

5.1 Flat Tax & Political Philosophy
  • Math Help

    Tax evasion, which involves intentionally hiding income, falsely claiming deductions, or another means of not paying taxes owed, is illegal. Tax avoidance, however, means reducing taxes owed by legal means. For instance, you can reduce your tax liability by

    • earning tax-free income from tax-exempt bonds or mutual funds.
    • contributing to a qualified retirement account, such as a traditional IRA or 401(k)
    • making a charitable contribution.

    There are many other ways to legally reduce your tax burden. For instance, consider the itemized deductions for individual taxpayers in the Internal Revenue Code at Cornell University Law School.

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  • Checkpoint Solution
    1. regressive tax; It takes a smaller proportion of an income as the income rises.
    2. progressive tax; After certain deductions, a larger proportion of the taxable estate is paid in taxes as the value of the estate increases.
    3. flat tax; A flat tax rate of 15% is applied to profit of the sale of a stock investment.
  • Comments (2)

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    system user
    Guest   2 years ago |
    system user
    Ron Larson (author)1 decade ago |
    When you get to name something, you have a great power to put your own slant on the concept. Considering the implications, I would guess that whoever named these two types of taxes was against "regressive taxes" and for "progressive taxes."