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 ?
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.
Happily, the constitutional convention only has the power to launch the idea of a graduated income tax. If they do, we trust the people will have the good sense to reject it.
Let's have a graduated income tax constitutional amendment that protects us from their future spending whims.
For months, the Pritzker administration has focused on a change to the state constitution to create a graduated income tax in which higher earners pay higher rates.
One of Bruce Rauner's top priorities when he decided to run for governor was stopping a graduated income tax. And now, not even five months after the near-billionaire Rauner's involuntary departure, the voters will soon be given a choice, courtesy of the billionaire Gov.
"The governor has held firm on (increasing) the minimum wage, and the same with the graduated income tax. He's made a strong push and shown he has lots of money to sell the idea in the next election," Redfield said.
It took a little good ol' fashioned Illinois political sleight of hand to put a question regarding a graduated income tax before you.
The ratios would shift if voters approve a graduated income tax in November 2020.
Supporters believe the proposed graduated income tax rates can be easily absorbed by those who will be hit hardest.
Dubbed Jarvis II, Prop 9 would have cut state graduated income taxes by $4.9 billion.

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