Progressive tax

A progressive tax, or graduated tax, is a tax that is larger as a percentage of income for those with larger incomes. It is usually applied in reference to income taxes, where people with more income pay a higher percentage of it in taxes. The term progressive refers to the way the rate progresses from low to high, but over time it has become confused with modern.

Related Topics:
Tax - Percentage - Income - Income tax

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The opposite of a progressive tax is a regressive tax. In this case, the amount of the tax is smaller as a percentage of income for people with larger incomes. Many taxes other than the income tax tend to be regressive in practice: e.g. most sales taxes (since lower income people spend a larger portion of their income), social security taxes (because they exclude interest, rent, dividends, capital appreciation and other kinds of income common for the affluent), excise taxes, and so on. (A flat tax, also called a proportional tax, is one where the tax amount is fixed as a function of income, and is a term mainly used only in the context of income taxes.)

Related Topics:
Regressive tax - Flat tax

~ ~ ~ ~ ~ ~ ~ ~ ~ ~