[Letters] Progressive tax or tax evasion?
The government announced a plan to impose a progressive tax system to alleviate the burden of national debt. Indeed, the administration operated expansionary economic policies to redress the financial predicament and it might be the right time for the government to increase the budget by retrenching tax benefits given to companies and imposing a progressive tax system.
While the progressive tax system is reasonable in that it reduces the burden on the low income earners and increases the tax revenue from the rich, some concerns are that it would ultimately discourage the rich from activating economic activities or encourage them to commit tax evasion.
One plausible solution to this would be dividing the rich according to their level of wealth. For instance, the rich group may be classified as “moderate” or “prohibitive.” While the moderately rich group would be required to pay the increased amount of tax, the prohibitively rich group will be eligible for a less increased amount of tax. By doing so, the very rich group would remain as a powerful source that leads and contributes to the national economy. Although the government’s tax revenue will be less than before, the government will see an increased budget compared to the economy of expansionary policies.
Moreover, this classification system would encourage the modestly rich group to continue its economic activities, so that they too may enter the prohibitively rich group.
Currently, the government’s mission is to ensure that the progressive tax system acts accurately and legally. While the desire of the moderately rich group to evade taxes remains unsolved, the tax system based on the new classification would at least urge each group to be honest and comply to social requirements with less pressure.
Seongnam Foreign Language High School student