1. Negative points of the proposed tax systemThe income tax system ensures a stable source of revenue for the government. Even with a 10% unemployment rate, the government will still make money from the remaining 90% of the workforce. As long as workers make money, so does the government. Therefore, the government does not have to worry about where to find money, even in an economic depression. However, this is a luxury that the government will not be able to enjoy with a single federal taxation system. Gasoline prices and usage are affected by market trends and economic performance. At some point consumption will be low and its fluctuating price will continue to affect how much the government makes from a single gallon. Therefore, unlike income tax, the government will not have a stable source of revenue. This will affect the economy and the well-being of society (Nishiyama & Smetters, 2005). The proposed taxation technique is also uncertain. With income tax, the government is able to calculate how much money it expects because it has employment records and all employees are registered with the tax department. However, in the case of gasoline, it is difficult to predict consumption because we do not know when the price will change, when consumers will resort to a substitute product or when the supply will decrease. This poses financial planning challenges to the government which can be easily eradicated through a safer tax system such as income tax. Government planning is crucial for economic and social development. Inadequate planning can have serious economic consequences for society. Therefore, with the new system in place, we not only face a fiscal challenge, but also an uncertain economic backdrop...... middle of paper ...... wealth, the current tax system is fair. On the other hand, most populations use and favor the income tax system because it does not dig deep into one person's pockets and forget about others. Everyone can do their part (Conesa & Krueger, 2009).ReferencesAvi-Yonah, R. & Slemrod, J. (2002). "Why tax the rich? Efficiency, fairness and progressive taxation". The Yale Law Journal 111 (6): 1391-1416Conesa, J. & Krueger, D. (2009) Taxing capital? It's not a bad idea after all. American Economic Review, 99(1): 25.48. Correia, I. (2010). Consumption taxes and redistribution. American Economic Review, 100: 1673.1694. Jehle, G. and Reny, P. (2000). Advanced microeconomic theory. Addison Wesley Paperback, 2nd edition: Nishiyama, S. & Smetters, K. (2005). Consumption taxes and economic efficiency with idiosyncratic wage shocks. Journal of Political Economy, 113(5): 1088.1115.