When considering progressive tax rates, the actual meaning is that the tax rates increase as the taxable rates increases to an extent. The saying a lot to a little means that the increase of tax when talking about the average tax rate or marginal tax rate. Progressive tax rate is also applied for the individual tax system as a whole system. Also, progressive tax rate includes an intended subject to income tax.
List of Pros of the Progressive Tax System
1. Precedes Happiness of Citizens
The progressive tax rate system are that it precedes happiness of citizens through the happiness of goods and services and also products. These goods and services and products of happiness could be exampled through the education, transportation and the pursuit of well being.
2. Exceptions Made
The higher income families get taxed more and higher than the lower income families get taxed less and at a lower amount.
3. Earn Tax Back
This next pro of progressive tax really stands out a lot, because in the future can earn his tax back in the future for a lifetime.
List of Cons of the Progressive Tax System
1. Increasing Taxes on More Income
The higher income families pay more tax, because they make more money, than the lower income families who make less money. Another con is when progressive tax reduces income equality. These pro and cons are to keep in mind, for whenever you want to know more about progressive tax rates.
2. Various Rates of Measurement Used
The way to measure is through the suites index, the kini coefficient index, or the Hoover index. These indexes have been created to measure the progressing of taxation.
When summing this up, progressive tax has a lot of pros and some cons for people to understand. With the beginning of the marginal rate, income tax or even average tax rate. All of these things can contribute to the fact that even though tax is upsetting to people to pay, it can be to things for the long term being. These are all things to keep in mind when planning for the future.
