Title: What Are the Pros & Cons of a Progressive Tax? | Pocketsense
Headings: What Are the Pros & Cons of a Progressive Tax?
What Are the Pros & Cons of a Progressive Tax?
Redistribution
Anti-Innovation
Safety Net
Fairness and Transparency
Alternatives to the Progressive Income Tax Model

Content: In a progressive system, taxes are collected from higher earners and money redistributed to those further down the income scale through social security benefits and government spending on public services such as schools and hospitals. Anti-Innovation
Opponents of progressive income tax systems claim that they stifle innovation and encourage high-worth individuals to hide their money offshore or leave the country in search of more lenient tax regimes. The argument goes that high earners will be discouraged from making more money or decide to hide some of their income if they're forced to hand more of it over to the Internal Revenue Service. Supporters of a flat tax point to evidence that tax receipts from the rich rise when the rate they're asked to pay goes down. When the top rate of tax was slashed from 73 percent to 25 percent in the 1920s, the share of taxes paid by those who made more than $100,000 a year -- more than $1 million in today's money -- increased from 28 percent to 51 percent, according to The Wall Street Journal. 00:00
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Safety Net
In a progressive income tax system, when an individual's income falls, so does the tax burden. This can provide some protection to mostly low- and middle-income taxpayers when the economy takes a turn for the worse, although the rich can also benefit if a fall in their income pushes them into a lower tax band. Under flat income tax regimes, governments may be forced to pay out more benefits to lower income individuals and families who are over-stretched by having to pay a higher rate of income tax. Administering the payment of these benefits would cost money that would have to come out of the public purse. Fairness and Transparency
Many people argue that the progressive tax system in the U.S. is anything but.