Congressman Patrick indicates that he is opposed to tax proposals that call for a flat tax rate because the structure would not tax those individuals who have the ability to pay the tax. Discuss the position of the congressman, giving consideration to tax rate structures (e. g., progressive, proportional, and regressive) and the concept of equity.

Answer and Explanation:

Considering a tax rate structure that is progressive, an increase in the tax rate leads to an increase in the income of the taxpayer's.

As at the year 2016, the following tax rates applies with regards to the filling status and tax paid on the taxpayer's income: 10%, 15%, 25%, 28%, 33%, 35% or 39.6%.

Considering a tax rate structure that is proportional, regardless of the tax payer's income, it is the same tax rate that applies to all taxpayers.

Considering a tax rate structure that is regressive, there will be a decrease in the tax rate as the taxpayer's income increases.

The concept of vertical equity states that taxpayers that earns more should pay higher tax and that their ability to pay this tax must be considered.

Thus, Congressman Patrick's indication that he is opposed to tax proposals that call for a flat tax rate because the structure would not tax those individuals who have the ability to pay the tax is in theory, correct; all taxpayers should pay their taxes at a similar rate, irrespective of the abilities to pay.