Concept: November 28, 2021. What is Progressive Taxation?

[marcusantoniu26]

Progressive taxation is a way of taxing that collects money based on the taxpayer's capacity to provide payment. Low income people pay lower taxes than on those with a higher income.

An example of progressive taxation is the US Federal Income Tax. There are 7 brackets of taxable income. The people with less income pay 10%, the people with more income pay 37%.

People who favor this way of taxing claim that it allows for poor people to have more disposable income for consumption. They also claim that more tax is collected from richer people so the total revenue would be higher. People who do not favor this way of taxing, state that it is a disincentive to success. They also state that it is a way of income redistribution, typical of socialist systems. For further reading, click this link.

This post is intended to only raise awareness. In order to make actual financial decisions please contact your financial advisor and/or tax advisor prior to making the decision.

Comments

[kawsar8035]

Thanks for highlighting the progressive taxation issue. Today I learned that there is a difference between taxes on high-income people and low-income people. It was good. Thank you.

[twicejoy]

Thanks for the enlightening and have a wonderful day

[seha76]

Taxes are from the people, by the people, for the people. However, abuse occurs everywhere and is difficult to eradicate because it is full of games in the world of taxation. Beautiful day my brother.

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