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Taxes is a difficult issue that effects everybody's life. The notion of fair taxation system is a merely mystical one because no matter how well planned it is there will be people who will not be satisfied for a number of reason. First of all, it is necessary to understand different types of taxes that are used for revenue generation by the US government. Famous Adam Smith once stated that taxes should be related to population’s ability to pay them. Clearly such tax as VAT (value added tax) does not prove it to be true, because the amount of VAT one pays for a particular object will remain the same for everyone no matter how much they earn. Such tax is a regressive one. It simply means that the more income an individual or a family receives, the less the proportion that is spent on taxes such as VAT. Therefore this type of tax will not influence people with high incomes as much as those with low level of earnings.

There is another kind of tax opposite to regressive one. A progressive tax means that people who earn more they pay in taxes, thus tax represents a greater proportion of person's income as their income increases. On the other hand regressive tax shows a smaller proportion of a person's income when income rises. Making conclusions from what is written above one can see that regressive tax is an unfair one, because it does not represent equal opportunities and responsibilities of tax payers.

In the state of California general sales tax represents only 14, 69% out of almost 47% of taxes that are generated for the total revenue of the state. Individual income tax and corporate tax put together amount to more than 23% of all taxes that are paid into governmental revenue. Clearly it is a big percentage that is paid on the basis of progressive taxation method when people are taxed according to their earnings and thus taxes on sales or consumption are reduced. Maryland is another state in which general sales tax is quite low compared to that paid on individual income. 10,51% and 8,18% are taxes on general and selective sales respectively, while individual income tax is as high as 20, 13% in Maryland. These figures say that people are paying very high taxes on what they earn and thus those who are on the low income end are not hit too much by these taxes. This state also operates mainly on the progressive system of taxation.

When both of these states are compared to Texas it becomes clear that its government has a different approach to taxes. Looking at the figures provided by state government finance department, one notices that general sales and selective sales taxes amount to 34% out of total of 42% that are accumulated by tax collection. These figures speak loudly of the method applied in Texas for total revenue generation. Evidently the state does not apply taxes on the individual or corporate income according to the numbers, therefore people are taxes unfairly based on regressive approach. Considering ‘0s’ that are in certain columns, if follows that people with low incomes are spending a huge amount of their earnings on consumption-sales taxes, rather than being taxes in accordance with the money they actually make not spend.

There is no great logic behind regressive method of taxation for the simple reason of unequal distribution of income in economy as a whole. If this type of taxes will be applied in all states it will help accumulate big amount of money in hands of certain number of people leaving those with lesser income much poorer than they were before paying out taxes. This in turn will lead to stagnation in economy as fewer people would be able to purchase things and thus provide revenue to government. Such one-sided approach to taxation is generally wrong because it only considers one population sector, thus a combination of taxes have to be applied in order to rationally distribute incomes and generate more revenue. Proportional taxation would be a better if not perfect type of tax for Taxes because currently it is obviously skewed to the sales side too much and has to be balanced out by increased individual income tax. Combination of various taxes for state revenue generation is necessary to ensure and help stability of country's economy overall and also to encourage citizens to honestly pay taxes.

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