Title: Tax Systems
Headings: Tax Systems
Tax Systems
Why It Matters Today
Sometimes, a Song Says it Better: Success Story, by The Who

Content: progressive, proportional, and regressive . Progressive taxes impose higher rates of tax on people with higher incomes—the more you make, the higher rate of tax you pay. Based on the “ability to pay principle,” progressive taxes include the federal income tax and most state income taxes. Proportional taxes impose the same rate of tax, regardless of income. A person making $10,000 and a person making $10 million pay the same rate of tax. The wealthier person writes a bigger check since x% of 100,000 is more than x% of 10,000. But both taxpayers pay the same percentage of their income. Some tax reformers have proposed adopting this system as a "flat tax" to replace the progressive federal income tax. Finally, regressive taxes impose higher rates on people with lower incomes. The poorer you are, the higher percentage of your income you pay in taxes.