Progressive Taxation
Progressive taxation is a tax system where individuals with higher incomes pay a larger percentage of their income in taxes compared to those with lower incomes. This approach aims to reduce income inequality by ensuring that wealthier individuals contribute more to government revenue, which can be used for public services and social programs.
In a progressive tax system, tax rates increase as income rises. For example, the first portion of income may be taxed at a lower rate, while higher income brackets are taxed at higher rates. This structure is designed to alleviate the financial burden on lower-income earners while ensuring that those who can afford to pay more do so, promoting fairness in the tax system.