Question

(3) Consider the following to tax schemes: n he irs Ax.sche first 300 s tax exempt and the remaining earning are taxed at 20P%. In the second system there is no tax exemption but the tax ratc i5 259% over the whole income earned? Which tax system is more progressive? Make sure that you ine your measures of tax progressivity and show whether they conflict with each other or not.

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Answer 1

1. A progressive tax is a tax that imposes a lower TAX RATE on low-income earners compared to those with a higher income, making it based on the taxpayers ability to pay. That means it takes a larger percentage from high-income earners than it does from low-income individuals.

2. A progressive tax is one that charges a higher tax rate for people who earn a higher income. The rationale is that people with a lower income will usually spend a greater percentage of their income to maintain their Standard of living

3. Those who are richer can typically afford the basic necessities in life (and then some).

4.The Income tax system under united states is progressive system.

5. The degree to how progressive a tax structure is depends on how quickly the tax rates rise in relation to increases in income. For example, if one tax code as a low rate of 10 percent and a high rate of 30 percent, and another tax code has income tax rates ranging from 10 to 80 percent, the latter is more progressive.

6.The Advantages of a Progressive Tax

Progressive tax systems reduce the (tax) burdens on people who can least afford to pay them, and these systems leave more money in the pockets of low-wage earners, who are likely to spend all of their money and stimulate the economy .

7. rogressive tax systems also have the ability to collect more taxes than flat taxes regressive taxes, as tax rates are indexed to increase as income climbs. Progressive taxes allow people with the greatest amount of resources to fund a greater portion of the services all people and businesses rely on, such as roads, first responders and snow removal.

8. Conclusion : Based on the above evidences and discusion it is quite evident that the the tax over the whole income at lower tax rate is more progressive.