Progressive income taxes

Definition

Progressive income taxes refer to a tax system where the tax rate increases as an individual's income rises. In this type of system, higher-income earners pay a larger percentage of their income in taxes compared to lower-income earners.

Related terms

Marginal tax rate: The tax rate applied to an additional dollar of income earned.

Tax brackets: Ranges of income that determine the applicable tax rate for individuals or households.

Regressive taxes: Taxes that take a larger proportion of income from low-income individuals compared to high-income individuals, such as sales taxes.