Is the US federal income tax considered to be progressive?

Question

Or, is it neutral, proportional or regressive?

Answer 1

The tax is progressive with respect to its base; in other words, the more taxable income an individual has, the higher the percentage of that amount that is paid as tax. The standard deduction and personal exemptions are progressive features, since they have the effect of creating a minimum amount of gross income that is free of tax; in effect, a zero bracket (which is what they were briefly called). However, the progressivity is offset in whole or in part by several factors. One is the low rate of tax imposed on capital gain, even for the highest income taxpayers. Another is the ability of high-income individuals to shelter large amounts of income from tax in one way or another. A major regressive factor is the social security tax, which is imposed on the very first dollar of income, and takes a much higher percentage of income from low-income taxpayers than it does from the wealthy. Finally, most definitions of progressivity do not take into account what might be called the marginal utility of money - a dollar of income taken away from a poor person hurts a lot more than the same dollar taken from a rich person.

The alternative minimum tax is something of a wildcard, which was intended to increase progressivity by imposing a lower rate of tax on a broader base. It seems to have had the effect of causing a bulge in the effective rate for the middle class.

In short, "progressive" and "regressive" are just words which mean no more than the methods used to define and measure them. In any event, the tax system is only one side of the equation (or the inequality); the real question should be whether, taking into account both taxing and spending, society distributes its burdens and benefits in a way that produces the greatest aggregate satisfaction.

Answer 2

Progressive. The more income you have, the higher the percentage of income they will take.

I checked Wikipedia and got a similar answer:

A progressive tax is a tax imposed so that the tax rate increases as the amount to which the rate is applied increases. The term "progressive tax" can be applied to any type of tax. It is frequently applied in reference to income taxes, where people with more disposable income pay a higher percentage of that income in tax than do those with less income. The term progressive refers to the way the rate progresses from low to high. Over time the term has also been associated with the concepts of modern or liberal.

The opposite of a progressive tax is a regressive tax, where the amount of the tax is smaller as a percentage of income for people with larger incomes than it is for those with lower incomes. Many taxes other than the income tax tend to be regressive, such as most sales taxes, since persons with lower income spend a larger portion of their income. Other examples of regressive taxes include social security taxes -- in part because they exclude interest, rent, dividends, capital appreciation and other kinds of income common for the affluent -- and statutory excise taxes.

A flat tax is a generic type of tax. When applied to income it is called a proportional tax, where the tax amount is fixed as a percentage of income. This term is generally used in the context of income taxes, although in the United States, Social Security taxes are a prime example of a flat tax, as it is fixed at 15% of income until a maximum income ceiling is reached. Above that ceiling, it becomes a regressive tax.

Answer 3

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Deep down inside, the wealthy know it is they who are the aliens, foreigners, cocooned in spaceship estates and private clubs. These entrenched fortresses are homes and breeding grounds for the predatory class. The power of wealth, however, does not come from within. Nor does it come from their mythological creator that they would have us fear. Deep down the wealthy know that their lives are no more significant than the lives that grant them their power. Their power comes from the willing multimillions who sustain them and their corrupt system. The working class at the bottom of the capitalist pyramid holds up the wealthy class through willing obedience. The working class prop up the wealthy as long as workers continue adopting the cause of the wealthy as their own. The willing enablers are in essence hoodwinked into toeing the line presumably out of free will and in their own interest. This worker devotion to the cause of the wealthy is a consequence of blaming the victim for their own trials and tribulations. If the working class blames itself then it preoccupies itself with guilt. Why blame the rich when everything in our culture tells us that the culprit is always someone else? There is the flavor-villain of the week, villains chosen by psyops specialists of the ruling elite. The enemy thus constantly changes. Reds. Commies, socialists, hippies, welfare moms, the homeless, liberals, gays, atheists, people with disabilities, etc. Take your pick. Consider that since 1962, federal revenue from progressive taxes (in which higher income people pay a higher tax percentage than lower income) dropped by 17%. Federal income from regressive taxes (which place a higher burden on those with lower income) increased by 135%. Since 1980, taxes on inheritance and investment have dropped by 31% while taxes on income derived from work have increased by 25%. Between 2000 and 2003, corporations (the institutions that perpetuate and insulate the plutocracy) saw their contribution to federal revenue through taxes fall by 36%.

Answer 4

The answer above is excellent.

I add that a key intention of the progressive tax system is that income is re-distributed from those who earn the most to those who earn the least. Also, while the US has a progressive tax system, it is important to note that our top personal income tax bracket (approximately 35%) is lower than most European countries.

Answer 5

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RE:
Is the US federal income tax considered to be progressive?
Or, is it neutral, proportional or regressive?

Answer 6

No. The tax code with all the 1,000,000 lines of loopholes, tax breaks, give aways, hand jobs, etc. at least half of it is socialist crap. Fairness principles would be better adhered to with a flat, progressive, or regressive tax code, any would be better if we got rid of those 1,000,000 lines of crap and ended ever being able to create it again.

Answer 7

That's a tricky question...

Answer 8

That's not wrong

Answer 9

I was asking myself about this too