Fair taxes exist in situations where authorities directly tax individuals or organizations for benefits that they receive for service provision. Hence the imposition of corporate taxes on businesses operating within a country is fair because the authorities provide the enabling environment which attracts these firms. Income taxes are also fair in instances where authorities have no other significant income sources. This is evident in Scandinavian countries that have some of the highest income taxes in the world due to a lack of mineral resources (except Norway which has oil) to sustain their impressive welfare economic system that provide free shelter, education and health to all citizens. On the other end of the scale are the Middle Eastern countries that have abundant oil resources that have decided to eliminate income taxes totally.
Pay a Tax Directly or Indirectly
Taxes are best paid directly instead of indirectly because of the possibility of transference. For example, businesses frequently shift taxes to their customers, which means that they evade a specific amount of what they should pay. However, businesses are owned by individuals who enjoy dividends from them regularly and taxiing these individuals and their earnings directly would ensure they do not shift their burdens to someone else.
Progressive Tax versus Proportional Tax
A progressive tax is better than a proportional tax because it takes cognizance of the different abilities that diverse members of society have. It is only fair that those who can shoulder heavier burdens assume them in the effort to develop society and improve the conditions of the population. Proportional taxes despite taking more from high income earners or organizations in absolute terms, mask the fact that at higher incomes, there is a tangible ease of payment compared to lower incomes.
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