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Best Tax Preparation Services

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Every April, we must file federal income taxes, either on our own or with the assistance of a tax accountant. Unless you're a tax policy wonk, you probably don't spend much time thinking about tax theory and practice. Despite the fact that America's tax law is notoriously complicated, taxes are broken down into simple categories. However, working with a financial counselor can help you reduce the impact of taxes on your finances. If you want to get more information about tax consultant and tax services you can visit Coast One Tax Group.

A regressive tax is one that does not benefit the wealthy. This could indicate that the tax is either lower or flat for wealthy folks (everyone pays the same rate). What causes a flat tax to be regressive? A flat tax would have a greater impact on persons with lower earnings than on those with higher incomes. A 15% tax would not result in a significant reduction in quality of life for a multimillionaire. A 15% tax on someone earning $30,000 per year would significantly reduce their spending power.

Progressive Tax

This is a tax that is greater for higher-income taxpayers. Wealthy people pay a higher tax rate than less wealthy people in a progressive tax system like the US federal income tax. This is why the wealthiest pay a higher tax rate than the middle class, and the middle class pays a higher tax rate than the working class.

Regressive Tax

A flat tax is the same as a proportional tax. All taxpayers, regardless of income, would pay the same “proportion” of taxes. Proportional taxes, as previously stated, are regressive taxes. These taxes are frequent in state sales taxes, but not so much at the federal level. Anyone who recalls the 2012 presidential campaign will recall the 9-9-9 Plan, a well-known proportional tax idea. A 9% business transaction tax, a 9% personal income tax, and a 9% federal sales tax were all part of the idea.

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