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Headings: Progresssive Tax Definition
Progresssive Tax Definition
What is a Progresssive Tax
Key Points
Advantages of a Progressive Tax
1. Reduces Burden on Poor
2. Higher Revenue
3. Support for the poor
4. Reduces Inequality
5. Lower economic inequality
Disadvantages of a Progressive Tax
1. Disincentivizes Wealth creation
2. Lower Government Revenue
3. Capital Flight
4. High Administrative Costs
5. Poorly Defined
Examples of Progressive Tax
Estate Tax
Income Tax
Luxury Sales Tax
Related Topics
General FAQs on Progressive Tax
Further Reading

Content: Support for the poor
A more progressive tax system can bring in higher levels of revenue, which is needed in order to provide social security services. It helps to provide the necessary revenue to fund housing assistance, unemployment benefits, disability benefits, as well as income support for those on low incomes. 4. Reduces Inequality
One of the biggest issues with regard to inequality is that of underfunded public services. The argument is that when services such as public education are underfunded, it creates a poverty trap whereby individuals are unable to access sufficient skills to move up the income ladder. By increasing the tax on higher-income households, they are able to subsidize such public services that will benefit the poor and help them up. At the same time, it reduces the gap in disposable income between the rich and poor. 5. Lower economic inequality
A progressive tax can help increase the level of disposable income of low-income households, whilst reducing the disposable income of high-income households. This allows the poor to be able to afford more goods, whilst reducing the amount that the rich can buy.