Progressive tax system


Also found in: Dictionary, Thesaurus, Legal, Wikipedia.

Progressive tax system

A tax system that taxes the wealthy at a higher percentage rate than the less wealthy.

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.
References in periodicals archive ?
To wit: The pro-progression interpretation of the benefits principle is invalid because it depends on the untenable assumption that the value of government benefits increases more rapidly than the rise in income; on the surface, sacrifice theory is a respectable argument for progression, but on closer examination, it is clear that its application produces an inequitable outcome (this is most obviously so when applied to income derived from greater work effort); the ability-to-pay argument lacks an equity principle (other than sacrifice theory) on which to base a fair tax system; and redistributing income through a progressive tax system is inequitable.
The most developed countries in the world, like the United States, Germany, Finland, Japan, all have progressive tax systems.
The presumption is a progressive tax system is going to fail because it hits different people unequally," grimmer says.
3 trillion annually on a largely voluntary basis, and it is a fair, progressive tax system.
The day a President is elected without money from big business is the day we will have universal health care, a progressive tax system, job protection, and true democracy.
That's not what you have in mind when you design a progressive tax system.
If you think today's relatively progressive tax system is full of holes and inequities, imagine the alterations awaiting a national sales tax.
Funding for liberal programs, therefore, depends on a progressive tax system --and sometimes requires direct regulation and intervention in the private market and restricting individual choices.
He added his party would go on with demands to reintroduce the progressive tax system in Bulgaria and not to renounce Christmas and Easter allowances for pensioneers.
Other countries are so small and ineffective at collecting revenue that they cannot afford a progressive tax system.
Gaudette's question about the maximum tax rate: "At a time when the country is in real economic trouble, the notion of asking for a somewhat more progressive tax system, that is for those who earn more than a million dollars to pay one or two points more, seems to me to be a matter of basic fairness and it would go a long way to putting people back to work.

Full browser ?