Fixed tax: Difference between revisions

{{Short description|Lump sum tax that is not measured as a percentage of income}}

{{Multiple issues|

{{unreferenced|date=December 2008}}

{{unbalanced|date=December 2008}}

{{Taxation}}

A '''fixed tax''' is a [[lump sum]] [[tax]] that is not measured as a [[percentage]] of the tax base (income, wealth, or consumption). Fixed taxes like a [[Tax per head|poll tax]] or [[sin tax]] are often considered [[regressive tax|regressive]], but could have [[progressive tax|progressive]] effects if applied to [[luxury goods]] and [[Service (economics)|services]].

Since [[citizens]] share common [[roads]], [[military]] protection, [[policing]], and other [[Civil service|government services]], some argue that citizens should pay the same amount for basic [[infrastructure]]. Fixed taxation removes the [[moral dilemma]] of two individuals having to pay significantly different amounts in order to receive the same services, which could be argued as [[discrimination]] against economic success.

It is argued that a fixed tax can save on tax compliance costs and improves [[privacy]]. Unlike [[proportional taxes]], a fixed tax does not necessitate public insight, i.e. [[governments]] would not need to know individual [[income]], [[wealth]], or [[Consumption (economics)|consumption]].

However, when applied as a precondition of membership in [[society]] or on products bought by the poor, it functions as a potentially extreme regressive tax in that it doesn't consider a person's ability to pay unless further adjustments are made (e.g. the way that the [[Australia]]n [[Tertiary education fees in Australia#HECS|HECS]] system applies tertiary education charges from a fixed schedule, but defers payments according to people's ability to pay by piggybacking payments as a progressively based surcharge on [[income tax]]). This can result in the lower income taxpayers paying much higher proportions of their incomes on taxes, incomes that are less disposable in that they must also pay a larger percentage of their incomes on necessities. Because of this, fixed taxes are better suited to funding governments which are not responsible for providing very much for the citizens and therefore do not have much to pay for.

==References==

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[[Category:Personal taxes]]

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