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Article: Progressive Tax
- Article from:
- Gale Encyclopedia of U.S. Economic History
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PROGRESSIVE TAX
A progressive tax system is one which assesses a higher percentage rate of taxation as income levels or income brackets increase. The U.S. federal income tax system is a progressive tax system. (For the following examples consider all the taxpayers to be filing their income tax returns as single individuals.) In 1999 the person making from 0 to $25,350 would pay 15 percent on all of their income. Therefore, a low-income person pays 15 percent on their total income. The person making up to $61,400 pays 15 percent on the first $25,350, but then pays 28 percent on the income between $25,350 and $61,400. To illustrate, if a middle income individual makes $50,000, 15 percent ...