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- Sat May 27, 2017 12:59 pm
#35436
Passage Discussion
Passage A:
The author begins by saying that Estonia was the first country to introduce a flat tax (in that case, a
tax with a rate of 26% across the board, with no available deductions). Estonia introduced this tax
in 1994, to be followed subsequently by eight other countries in doing so. At this point, the author
presents and then dismisses a common critical perspective on the flat tax: That such a tax works in
theory but not in practice. This belief, says the author, appears a questionable one given the many
examples that exist in the real world.
In the next paragraph, the author points to a second criticism of the flat tax—that it is unfair,
as compared with other countries which, critics claim collect a larger share of the income from
wealthier individuals.
The author begins the last paragraph by refuting the criticism that flat taxes are unfair. A flat tax calls
for a single rate of tax to be imposed only on income above a certain threshold; a tax could be made
more or less progressive with changes to the rate and threshold. The author closes the paragraph by
asserting that under the systems operating in most developed countries, there are huge incentives for
high-income earners to circumvent the tax system, complex tax codes allow them to do so, the author
says, the wealthy seem to end up paying the same amount under a flat tax as they would have under
previous codes.
Passage B:
The author begins this passage by asserting that many people don’t understand the distinction
between flat tax and progressive tax systems. Some such people are under the mistaken impression,
the author asserts, that the more income a person earns, the higher the rate he or she must pay on
that income. The truth is that all taxpayers are treated equally in that tax payers pay the same rate on
equivalent layers of income. High-income earners only pay a higher rate on the portion of income
above a specified amount.
A progressive tax system, says the author, treats people equally and recognizes that dollars are not
created equal. For the working poor, most income is spent on basic survival expenses such as food,
shelter, and clothing. Meanwhile, middle income workers are aware of expenses but have a greater
degree of flexibility to deal with changes in their earnings.
In the last paragraph of the passage, the author points out that some flat tax proposals note the
difference between survival spending and discretionary spending, taxing only the layer of income
beyond a certain threshold. As such, the author asks why such a system should only have two levels
(no tax versus the highest tax rate). The author closes the passage noting that if total tax revenues are
to be maintained, and the working poor are to pay less while high-income earners are to going to pay
less, the only ones who will be left to make up the difference will be members of the middle class.
Passage Similarities and Differences:
Similarities:
Both authors discuss flat and progressive tax regimes, misunderstandings about the different types of
codes, and the question of whether a flat tax can be fair.
Differences:
Only the first author mentions real world examples of flat tax implementation (Estonia and the
other eight countries that followed). The first author believes that flat taxes can be fair, and that
complicated progressive tax schemes allow the wealthy to avoid taxes. As such, the author believes
that the wealthy end up paying about the same under either type of tax regime.
Only the second author asserts that graduated progressive taxes treat everyone equally, based on
the equal tax rates levied on equivalent layers of income. The second author believes that a flat tax
unreasonably divides the population into two tax brackets, with the wealthy paying less, the poor
paying less, and the middle class making up the difference.
Passage A:
The author begins by saying that Estonia was the first country to introduce a flat tax (in that case, a
tax with a rate of 26% across the board, with no available deductions). Estonia introduced this tax
in 1994, to be followed subsequently by eight other countries in doing so. At this point, the author
presents and then dismisses a common critical perspective on the flat tax: That such a tax works in
theory but not in practice. This belief, says the author, appears a questionable one given the many
examples that exist in the real world.
In the next paragraph, the author points to a second criticism of the flat tax—that it is unfair,
as compared with other countries which, critics claim collect a larger share of the income from
wealthier individuals.
The author begins the last paragraph by refuting the criticism that flat taxes are unfair. A flat tax calls
for a single rate of tax to be imposed only on income above a certain threshold; a tax could be made
more or less progressive with changes to the rate and threshold. The author closes the paragraph by
asserting that under the systems operating in most developed countries, there are huge incentives for
high-income earners to circumvent the tax system, complex tax codes allow them to do so, the author
says, the wealthy seem to end up paying the same amount under a flat tax as they would have under
previous codes.
Passage B:
The author begins this passage by asserting that many people don’t understand the distinction
between flat tax and progressive tax systems. Some such people are under the mistaken impression,
the author asserts, that the more income a person earns, the higher the rate he or she must pay on
that income. The truth is that all taxpayers are treated equally in that tax payers pay the same rate on
equivalent layers of income. High-income earners only pay a higher rate on the portion of income
above a specified amount.
A progressive tax system, says the author, treats people equally and recognizes that dollars are not
created equal. For the working poor, most income is spent on basic survival expenses such as food,
shelter, and clothing. Meanwhile, middle income workers are aware of expenses but have a greater
degree of flexibility to deal with changes in their earnings.
In the last paragraph of the passage, the author points out that some flat tax proposals note the
difference between survival spending and discretionary spending, taxing only the layer of income
beyond a certain threshold. As such, the author asks why such a system should only have two levels
(no tax versus the highest tax rate). The author closes the passage noting that if total tax revenues are
to be maintained, and the working poor are to pay less while high-income earners are to going to pay
less, the only ones who will be left to make up the difference will be members of the middle class.
Passage Similarities and Differences:
Similarities:
Both authors discuss flat and progressive tax regimes, misunderstandings about the different types of
codes, and the question of whether a flat tax can be fair.
Differences:
Only the first author mentions real world examples of flat tax implementation (Estonia and the
other eight countries that followed). The first author believes that flat taxes can be fair, and that
complicated progressive tax schemes allow the wealthy to avoid taxes. As such, the author believes
that the wealthy end up paying about the same under either type of tax regime.
Only the second author asserts that graduated progressive taxes treat everyone equally, based on
the equal tax rates levied on equivalent layers of income. The second author believes that a flat tax
unreasonably divides the population into two tax brackets, with the wealthy paying less, the poor
paying less, and the middle class making up the difference.