Progressive tax system

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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 ?
However, instituting a more progressive tax system and using tax revenues to ensure equality of condition is the best way to alleviate poverty.
The United States already has one of the most progressive tax systems in the world, he argued.
Under the current progressive tax system, Harry's after-tax income will be $63,275 (after $11,725 in tax, which assumes that, since Harry's labor income is 50 percent of his total family income, the tax attributable to him is 50 percent of the $23,450 tax paid by the family).
Simplifying, while one group believes this is a good choice, as it shares prosperity and reduces social inequality, another believes a progressive tax system would result in people and firms paying more taxes.
The Coalition's idea of exempting the lowest paid from income tax is not only long overdue but a most welcome step towards creating a more progressive tax system.
Also, Congress is taking a hard look at critical tax policies as it seeks revenue raisers to pay for new legislation and pushes for a more progressive tax system.
On fiscal and monetary policy, the program calls for replacing a temporary income tax bill with the progressive tax system stipulated by the constitution.
Villagran told CAR, "The ultimate problem is that the oligarchy has never paid taxes and this government is seeking a more progressive tax system, but the oligarchy will never accept that.
A progressive tax system means that those with higher incomes pay a higher proportion of their income in taxes.
Do you think our current progressive tax system reflects American values?
Are any of these parts of the business community changing their tune over tax, suggesting a progressive tax system that is good for them, fair and transparent?
The state can't move toward a more progressive tax system without some new source of revenue to offset income tax reductions.

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