Progressive Taxation

Definition

Progressive taxation is a tax system where the tax rate increases as the taxable amount increases. This means that those with higher incomes pay more taxes than those with lower incomes.

Related terms

Regressive Tax: A tax that takes a larger percentage from low-income people than from high-income people. It's the opposite of progressive tax.

Flat Tax: A system where everyone, regardless of income, pays the same tax rate.

Tax Bracket: The range of incomes taxed at given rates in a tax system. As they move up the brackets, taxpayers face higher rates.