Glossary · Taxes

What is Progressive tax?

A tax whose rate rises as the taxable amount grows. Income is often divided into brackets and each bracket has its own rate: the higher rate applies not to the whole income but only to the part above the threshold. As a result, a person with a larger income pays a larger share of it in tax. This is the opposite approach to a proportional (single-rate) tax and a regressive tax. How a particular tax is structured in a given country is checked against that country's tax legislation.

Source: Britannica: Proportional, progressive, and regressive taxes; Britannica Money: Progressive tax

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