progressive tax

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Progressive Tax System

A system of taxation in which persons or corporations are assessed at a greater percentage of their income according to the theoretical ability to pay. That is, taxpayers pay more in taxes if they earn more in income. For example, taxpayers may pay 25% of their income in taxes up to a certain amount, and 35% of everything earned over that amount.

A theory behind progressive taxation states that persons or corporations who earn the same or a similar amount of money should be taxed in the same or a similar way. For example, the theory states that two individuals making $50,000 per year should be taxed the same amount, regardless of how they earned their income. This is known as horizontal equity. While most countries have some form of progressive taxation, it is usually coupled with other taxes, such as a sales tax, and few countries treat all income as exactly the same. See also: Regressive tax system.

progressive tax

A tax with a rate that increases as the amount to be taxed increases. For example, a taxing authority might levy a tax of 10% on the first $10,000 of income and increase the rate by 5% per each $10,000 increment up to a maximum of 50% on all income over $80,000. A progressive tax often uses high rates on relatively large incomes and tends to encourage tax shelters. The federal income tax, many state income taxes, and the unified gift-estate tax are progressive taxes. Compare regressive tax.

Progressive tax.

In a progressive, or graduated, income tax system, taxpayers with higher incomes are taxed at higher rates that those with lower incomes.

Those in favor of this approach say that the greatest tax burden falls on those who can afford to carry it. Opponents argue that it imposes an unfair burden on the people whose ingenuity and hard work make the economy strong.

progressive tax

A tax that imposes a greater burden on the wealthy than on those with low incomes because the tax rate percentage increases as one's income or assets increase.Income taxes and estate taxes are progressive taxes.Contrast with a regressive tax,such as sales tax,that charges the same percentage to all taxpayers but results in a heavier burden to low-income citizens.

References in periodicals archive ?
income tax with no deductions, a graduated income tax with no
A flat tax would replace the current, graduated income tax on families and businesses with a 20 percent flat tax, eliminating almost all personal deductions (state and local taxes, mortgage interest, charitable contributions) and city revitalization deductions (targeted jobs, low income housing, and earned income tax credits,) while scrapping or reducing the tax preference for municipal bonds.
And while that platform did propose a graduated income tax, the platform asked that revenue from that tax "should be applied to the reduction of the burden of taxation now levied upon the domestic industries of this country.
The progressive or graduated income tax divides Americans by income class and treats them differently, just as racial preferences - whether old-style Jim Crow laws or new-style affirmative action - divide Americans by race.
In it he stated his Square Deal policy, which supported a graduated income tax, control of trusts, labor protection, conservation, and an adequate army and navy.
The reforms further weaken--perhaps fatally--the theory of progressivity that has formed the foundation of the tax code since the introduction of the graduated income tax in 1913.
To the Democratic candidates (other than Marshall), the primary answer seems to be a graduated income tax that presumably would ask the rich to provide enough revenue to pay all the state's debts.
BOSTON -- Democratic gubernatorial candidate Martha Coakley and Republican rival Charlie Baker sparred Wednesday over tax policy, with Coakley insisting that she would seek to raise taxes only as a last resort and has no immediate plans to seek a graduated income tax in Massachusetts.
Both a central bank and an income tax--particularly a graduated income tax that largely consumes the wealth of the middle class in the name of taxing the wealthy--are powerful tools for bringing about this consolidation.
Some of the highlights of his career in which the Council took an aggressive public stand include passage of Proposition 2 1/2 in 1980, passage of the Research and Development Tax credit in 1991, the defeat of the Graduated Income Tax ballot initiative in 1994, passage and preservation of the Capital Gains Tax Phase-down law in 1994, and the passage of the Income Tax Rollback initiative in 2000.
To make that feasible, we must have a graduated income tax so that the wealthy among us begin to pay their fair share.
Instead, it recommended a graduated income tax that amounts to a poison pill.

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