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 ?
Their explanation is that without wars involving mass mobilization, the compensatory argument for sharply progressive taxes became harder to make.
"It would also provide the opportunity to introduce a more progressive tax structure, with higher rates applying to the better-off than at present.
Slightly progressive tax (and transfer) system(s) are designed to benefit one party (primarily, the top one percent) at the expense of another (the bottom 99 percent).
ySTANBUL (CyHAN)- A newly proposed tax bill set for debate in Parliament aims to create a more progressive tax system and close tax loopholes, Turkey's Finance Minister Mehmet E[currency]imE-ek said over the weekend.
Finance Minister Michael Noonan insisted it is a progressive tax. But that is ludicrous when you consider the higher rate of the tax only applies to a home worth [euro]1million or more.
According to the report, Hubbard opposed raising tax rates for the rich, but added, "We need a progressive tax system."
potentially preys on the poor," and "bingo may unintentionally prey on the poor." I think that it's much more appropriate to pray for the poor--as well as to help them financially through donations and a progressive tax system--than to seek to make money at their expense.
9) calling for the MOF to impose heavier or progressive tax rates on real assets with high turnover.
In the last weeks, one question has been broadly discussed in Latvia: is a progressive tax regime good for Latvia?
The reformers have a mountain of evidence to justify a shift to more progressive tax structures.
Among the 15 papers are discussions of the choice between a flat tax on labor income or a progressive tax on capital income, the Nordic dual model of capital income taxation as experienced in Sweden over 15 years, and the consequences of demographics and globalization for the Finnish tax system.

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