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What is one advantage and one disadvantage of a progressive income tax?
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High School Teacher
A Progressive Tax is a form of taxation in which different economic groups pay more or less depending on their income. For example, in the United States a family making up to $35,000 yearly pays a 15% income tax, while a family making up to $174,000 yearly pays a 28% income tax. The U.S. tax system is the most progressive in the world, according to studies.
One advantage of a progressive tax is that it allows higher taxation on individuals who are more able to afford it. This allows a more even spread of wealth, with the richer individuals contributing more to the welfare of the country than the poorer individuals. This increases the income to the government without placing undue burden on lower income groups.
One disadvantage of a progressive tax is that it encourages high-earners to move their assets or earnings overseas so they will not be taxed as highly. This removes money from the country, and eliminates the benefits of higher taxation.
Posted by belarafon on April 16, 2012 at 3:14 PM (Answer #1)
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