Progressive Taxation

Definition

Progressive taxation is a tax system where the tax rate increases as income increases. It aims to distribute the tax burden more fairly by taxing higher-income individuals at higher rates.

Related terms

Regressive Taxation: A tax system where the tax rate decreases as income increases, placing a higher burden on lower-income individuals.

Marginal Tax Rate: The tax rate applied to each additional dollar of income earned.

Income Redistribution: Policies aimed at reducing income inequality by transferring wealth from high-income individuals to low-income individuals.