The Application of Ethics in Progressive Taxation

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The Application of Ethics in Progressive Taxation For many centuries, societies have always judged individuals based on their social class. This social structure permits the society to place an individual or a group in a certain social class based on their economic status. The four social classes include; the upper class, the middle class, the working class, and lastly the poverty class. (Business Dictionary, Social Class) With income, comes tax that is given to the government based on the income earned annually. This leads us to questioning whether it is morally justifiable to tax wealthier individuals and families heavier while taxing the lower income individuals and families at a lower tax bracket. This process of taxation is considered to be “progressive taxation”. (Investopedia, Progressive Taxation) Progressive taxation is approved by some whereas it is criticized by others. This research paper will reflect upon these two perspectives and also reflect whether taxation aimed at redistributing wealth is morally reasonable. According to John K Roth’s definition of deontological theory in “Ethics”, he defines deontology to be the determination of whether an action is ethical or unethical according to its intention rather than the consequence of the action. Consequentialism is the determination of whether an action is ethically correct or incorrect through analyzing the consequence of the action rather than the intention. (Roth 315-316, 367-369) During this research paper, Roth’s ethical theories of consequentialism and deontology will be used in order to distinguish whether progressive taxation and the use of taxation to redistribute wealth can be identified as morally or unethically correct. According to the article “Understanding Attitudes toward Progressive Taxation”, it is believed that the progressive rate structure is one of the most desirable forms of taxation upon many philosophers, economists, and tax policymakers. Those that believe in progressive taxation have the notion that the higher-income taxpayers should be liable to higher taxes than those of lower income. (Michael, Peggy, Cassie 166,168) According to “Progressive Taxes” by Joel B. Slemrod, in a progressive taxation scheme; “one’s tax structure is more progressive than another if its average tax rate rises more rapidly with income.” (Selmrod) According to the deontological theory, the intention of this progressive tax structure is to tax every individual or family according to their income and so it betters the life of many people within the society. The consequence of the tax policy will allow all individuals within the society to live their lives according to their needs. Wealthy individuals will still have enough income to live better than those of lower social classes, making it morally ethical because it’s consequences according to the consequentialist theory is saving many lives from poverty. An experiment was done on four-hundred and sixty underground students that were taking nine introductory courses and two additional tax classes at two large university institutions in different regions in the United States. The students were given different scenarios to each of the tax policies that are used to tax citizens in the United States and this included;

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