progressive tax

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Related to Graduated tax: progressivity, Graduated 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 ?
A non-VAT taxpayer electing the graduated tax rates shall continue to pay percentage tax.
When shifting from a non-VAT to a VAT registration, a taxpayer who has previously made the election of eight percent tax shall be subject to the graduated tax rates immediately.
In the graduated tax rate structure, single filers would pay the maximum rate of 7.99 percent on all income once their taxable income tops $750,000.
In the state rankings, under the graduated tax proposal:
Opponents of the graduated tax argue that creating different rates for different levels of income is unfair and will push people to leave the state, which has seen a steady population decline over the past five years.
Senate Joint Resolution Constitutional Amendment 1's passage means the voters will be given the opportunity to decide whether the state can have the authority to set graduated tax rates via a ballot measure in the November 2020 presidential election.
A bill setting graduated tax rates, which passed committee Friday, had not been taken up by the House as of 6 p.m.
"The graduated tax will give Springfield the ability to raise taxes on whoever they want by manipulating rates and brackets," said state Rep.
Senate Joint Resolution Constitutional Amendment 1's passage means the voters, in November 2020, will be given the opportunity to decide whether the state can have the authority to set graduated tax rates.
A bill setting graduated tax rates, which passed in committee Friday, was not approved by the House by 6 p.m.
Graduated tax rates join amendment in moving to House floor
The amounts may be adjusted, but the idea is that old vehicles and gas guzzlers should be subjected to meaningful graduated taxes; and that the age and consumption taxes will approximate the amount of taxes the government receives from oil products.