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progressive income tax

A progressive tax, or graduated tax on income (or capital gains) is one in which the marginal rate of taxation increases for larger incomes, usually with a system of tax bracket?s.

The term progressive refers to the way the rate progresses from low to high, but over time it has become associate with progressive political beliefs.

The opposite of a progressive tax is a regressive tax?. In this case, the amount of the tax is smaller as a percentage of income for people with larger incomes. Payroll tax?es, and consumption tax tend to be regressive in practice, since lower income people spend a larger portion of their income.

see also: flat tax, tax reform, fiscal policy.

Progressive tax rates in selected countries

United States
In the United States as of 2004 there were six "tax brackets". For the unmarried, these percentages in 2003 and 2004 are:

10%: $2,651 - $9,700
15%: $9,701 - $30,800
25%: $30,801 - $68,500
28%: $68,501 - $148,700
33%: $148,701 - $321,200
35%: $321,201 and up

Sweden

Sweden has three income tax brackets (2004)

31% on $0 - $41,700)
31% + 20% on $41,700 - $63,000
31% + 25% on $63,000 and up

Income tax is payed on the amount that falls within each bracket. To ensure that each increase in gross income is accompanied by an increase in net income.

Canada

In 2004, Candian federal tax brackets were:

0% on $0 - 8000
16% on $8000 - $35,000
22% on $35,000 - $70,000
26% on $70,000 - $113,804 13% 15.83%
29% over $113,804

The Canadian tax brackets were fully indexed in 2004, to prevent bracket creep?.









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