Assume that the present tax system and its progressive rate structure are replaced by a so-called flat tax method.Under this system, a single rate would be applied to any type of income regardless of source, and large exemptions would be allowed to each taxpayer to eliminate low-income taxpayers from the tax rolls.One favorable result of such a system is to completely eliminate the motivation for arrangements when the sole purpose is to split or shift income to lower bracket taxpayers.

Question

Quizplus · Accepted Answer

The Answer of Assume that the present tax system and its progressive rate structure are replaced by a so-called flat tax method.Under this system, a single rate would be applied to any type of income regardless of source, and large exemptions would be allowed to each taxpayer to eliminate low-income taxpayers from the tax rolls.One favorable result of such a system is to completely eliminate the motivation for arrangements when the sole purpose is to split or shift income to lower bracket taxpayers.

Assume That the Present Tax System and Its Progressive Rate