There are two things in life that are certain: death and taxes. In his book entitled An Inquiry into Nature and Causes of the Wealth of Nations, the great economist Adam Smith gave us some guidelines on good taxation. First off, he said that taxes needed to be fair, this may be kind of obvious, but it is the most important aspect of a good tax code. If the taxes are unfair, the people will revolt. Secondly, a good tax code needs clarity, so that people will understand what they are doing. Thirdly, it needs simplicity. This goes right along with clarity. People don't want to spend hours trying to do their taxes because of their complexity, and as a second benefit, a simple tax code helps prevent fraud. And lastly, a tax code needs to be flexible. Economies and taxpayer situations fluctuate, and a rigid tax code will never be able to keep up.
A personal income tax is a tax based on how much money you make. Whether or not it is fair is debatable. It sounds unfair to have the government take your hard-earned money. But if you have to have a tax, why not base it on how much you can afford. Our particular income tax code though is rather unfair, because people with a higher salary pay a higher tax rate. It is extremely unclear and anything but simple, and that causes many headaches come tax-filing time. But the income taxes are very flexible; there are many deductions so that people with special conditions do not have to pay more than they should.
Sales tax is completely unfair, why should people have to pay for something that they produced. And with income tax you get into double taxation, because you are taxed for selling the item, and you are taxed on the amount of money you make off of the sale. Sales tax is very simple, pretty clear, and fairly flexible.
Estate tax is a tax that is completely and totally unfair. There is absolutely no reason for it. First off you are taxed for the money you made to get the item in the first place... Continues...