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A so-called progressive tax is a tax which increases as a percentage of one's wealth. Using the federal income tax as an example, a person who makes between $0-$7,500 pays no taxes, any income between $7501 and $30,650 is taxed at 15%, up to any income above $336,551 being taxed at 35%.

A progressive tax differs from what people call "regressive" taxes, like sales tax, which takes a larger percentage of money from individuals with less money.

2007-11-06 06:09:37 · answer #1 · answered by hudson r 2 · 0 0

The rates are higher the higher the income - poor people pay little or no tax, middle class pay 15-20%, richer people pay 30% or so.
A fixed amount tax can be progressive if applies only to expensive things - a 10% tax on yaughts.
A regressive tax is one that hits low income people harder - a sales tax on clothing is considered regressive because rich people spend a smaller proportion of their income on clothes.

2007-11-05 17:04:43 · answer #2 · answered by Mike1942f 7 · 0 0

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