Title: Progressive Tax Definition
Headings: Progressive Tax
Progressive Tax
What Is a Progressive Tax?
Key Takeaways
Progressive Tax
Understanding the Progressive Tax
Advantages of a Progressive Tax
Disadvantages of a Progressive Tax
Progressive Tax vs. Regressive Tax
Progressive Tax vs. Flat Tax

Content: The dollar amount owed may be smaller, but the effect on their real spending power is greater. The degree to how progressive a tax structure is depends upon how much of the tax burden is transferred to higher incomes. If one tax code has a low rate of 10% and a high rate of 30%, and another tax code has tax rates ranging from 10% to 80%, the latter is more progressive. Advantages of a Progressive Tax
On the pro side, a progressive tax system reduces the tax burden on the people who can least afford to pay. That leaves more money in the pockets of low-wage earners, who are likely to spend all of that money on essential goods and stimulate the economy in the process. A progressive tax system also tends to collect more taxes than flat taxes or regressive taxes, as the highest percentage of taxes is collected from the highest amounts of money. A progressive tax also requires those with the greatest amount of resources to fund a greater portion of the services that all citizens and businesses rely on, such as road maintenance and public safety. Disadvantages of a Progressive Tax
Critics of progressive taxes consider them to be a disincentive to success. They also oppose the system as a means of income redistribution, which they believe punishes the rich, and even the middle class, unfairly. Opponents of the progressive tax generally are supporters of low taxes and correspondingly minimal government services.