THE RICH VS POOR- WHO SHOULD PAY MORE TAX?
Tax has been in existence from time immemorial. Jesus even encouraged people back then to pay Ceasar's thing to Ceasar but God's things to God.He was referring to tax payment. Now, whatever you do, you are likely going to be taxed on it.
Tax is a compulsory payment by individuals to the Government. Business owners and employers are charged to pay tax from the income they generate and profit they make. Some individuals may also be made to pay tax due to some properties they possess or inherited.
The Question now is
SHOULD THE RICH/BIG BUSINESSES PAY MORE OR SAME TAX AS The POOR OR SMALL BUSINESS OWNERS?
Before we talk about that, let's see more about taxes.
Oftentimes, taxes are not charged on the whole profits made. There are some allowable deductions that can be made from the profit to cater for things like workers Salaries, rent and utilities, other expenses etc before the rest can be taxed. Besides, owners of big businesses( the Rich) and owners of small businesses ( let's say the poor) do not have same profits. So even if they are charged the same rate, they still will not be paying the same amount for tax.
Moreso, We have what is called CIT tax. The Corporate Income tax . This depends on the money a company is making; that is how they are taxed. Yet, there can also be allowed some deduction which helps to reduce their taxable income. A big business such as an oil company is expected to be charged higher than a small business owner. However, some big companies hide the earning or profits, somehow they have two books,😃 one holding the real income they generate which they are supposed to be taxed with, while the other with incomplete entries so they can be charged less.
We also have the PAYE tax where employees pay as they earn. Some employers of labour too pay taxes for their staff, and each staff payment is made based on the amount each one earns.
There are however some **Tax Exemptions **where some businesses are exempted from paying tax, such as Agricultural products, these are done to encourage people to venture in such business.
RICH VS POOR TAX PAYMENT
When the rich are taxed higher than the poor, it brings about the following
ECONOMIC GROWTH in the society. If managed well, proceeds from the tax are used to provide basic amenities for the society such as good roads, hospitals, Schools, etc. It also helps the Government to give grants to low income earners or small businesses.
MORE JOBS can be created and made to thrive without paying tax. They are exempted from taxes and allowed to run for some months before taxes are being demanded. This can encourage more people to go into business , no matter how small.
INVESTORS DELIGHT
The rich paying higher tax rates or the poor paying less attracts investors who are willing to invest and put in more capital into small business.
HOWEVER, paye or withholding tax should be made on behalf of employees to avoid task evasion and it guarantees that all employee are dutifully paying their taxes. This what is practiced in my School. Before our salaries are paid, tax is deducted and paid on our behalf.
Despite all the aforementioned, I am not favouring the poor nor the rich, rather the Government should strike a balance. I advocate for a tax system that is balanced which will distribute tax burden fairly between the rich and the poor, ensuring that the tax rates are bearable and reasonably so.
If there is fairness on both sides, even the Government benefits because there will be no tax evasion, definitely, all businesses and individuals will be willing and happy to pay Ceasar's things to Ceasar.
SOLUTIONS
Tax Exemptions: Some business should be allowed to thrive longer without tax charges. This can help the business grow better and be ready with it's capital large enough to run as others who pay taxes
No tax evasion: Where would the Government get capital for projects, grants and fixing of some basic amenities if businesses and individuals evade tax? A good citizen should pay tax.
Reduced tax rates: Whether the business is big or small, when tax rates are low, it gives room for more investments.
Thanks for stopping by. I am glad to participate.
Note: This post is not a financial advice, I am not an accountant but I had a chat with one who contributed some ideas on tax.
Thanks again for the visit.
