What is a Progressive Tax?
A progressive tax is a tax rate applied to either income or profits, or spending, that increases as income/profits, or spending increases. This is the tax system used in the US, and in many other countries. Those who make the least amount of money tend to pay the lowest percentage of their income in taxes. People who make larger amounts of money are taxed at a higher percentage. Taxation in most countries, including the US, is slightly more difficult to compute. Many misunderstand the progressive tax rate as the following formula: Mr. X who makes $20,000 US Dollars (USD) will pay 10% of his income in taxes. Mr. Y makes $40,000 USD and will pay 15% of his income. Ms. Z makes $60,000 USD and will pay 20% of her income in taxes. Instead, taxes on amounts made increase progressively. My. Y would pay 10% on the first $20,000 USD he makes, and 15% on the second $20,000. Ms. Z would pay 10% on the first $20,000, 15% on the second, and 20% on the third. There are also a number of things that c
