progressive tax

(redirected from Graduated income tax)
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Related to Graduated income tax: Progressive taxation, Progressive tax system, Regressive tax, Progressive income tax

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 ?
Changing that to impose a graduated income tax -- under which wealthier residents would pay a higher percentage of taxes -- would require a change in the state constitution, a process that would take at minimum several years to complete.
She said during the debate last night that she was interested in pursuing a graduated income tax, something that the voters have rejected soundly at the ballot box several times over the course of the last 20 or 30 years,'' Baker said Wednesday after a private meeting with mayors and other municipal officials.
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.
Instead, it recommended a graduated income tax that amounts to a poison pill.
Further investigation led Russo to conclude that our nation wasn't drifting toward tyranny, but rather being propelled in that direction by a powerful but dimly seen group of elitists whose handiwork includes the graduated income tax and the IRS.
Out in Colorado voters took up a ballot question that asked them to raise their taxes to put $1 billion more each year into the school system along with a change from a flat rate to a graduated income tax.
Massachusetts voters rejected moves to adopt a graduated income tax in 1962, 1968, 1972, 1976, and 1994.
We hope one of the main agenda items - a graduated income tax for Massachusetts - wilts as quickly when lawmakers reconvene the convention in July.
Advocates of a graduated income tax reason that imposing higher tax rates on those with higher incomes must produce more revenue for the state.
Second, a comparison of tax systems among the states shows that a graduated income tax rate does not necessarily mean a balanced budget.
The chief reason, then, that any state experiences a flow of black ink or red ink, is not whether it adopts a graduated income tax rate, a flat rate, or none at all.
Other proposals included: Allow any city or town to replace its residential real estate tax with a local income tax (H 3607); increase taxes by allowing a graduated income tax (a higher rate) on millionaires (H 2733); reduce the state income tax rate from 5.

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