Progressive Tax System

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Tax progressivity involves careful planning of taxation in order to ensure that tax rates are higher for individuals with higher incomes than they are for low-income taxpayers (Lee, Johnson, & Joyce, 2013). Prior to developing a tax system, governments need to be aware of the goals of the system that they intend to put in place. Based on the party that currently holds the majority in the U.S. government, the goals of the U.S. tax system can vary significantly. For example, the Republican Party tends to favor proportional taxation systems, while the Democratic Party believes in the use of a progressive system. Despite these differing beliefs, the majority of the federal tax system tends to be progressive (Lee, Johnson, & Joyce, 2013). Considering …show more content…

following a progressive system, there are certain taxes imposed by federal, state, and local systems that tend to be regressive. As the text discusses, certain taxes, such as sales taxes, may appear proportional; however, such taxes tend to be regressive upon further evaluation (Lee, Johnson, & Joyce, 2013). As the text states, “a sales tax on purchases seems to treat all taxpayers equally but it is often actually regressive in that poorer families spend a greater proportion of their incomes on taxed items than wealthier families do,” (Lee, Johnson, & Joyce, 2013, p.136). A similar issue exists at the federal and state levels in that the payroll tax is also regressive. While the tax rate is the same for every individual, this tax is only imposed up until a certain amount of income is reached for that individual, which stood at $118,500 in 2016 (Miller, 2015). Those with an income near the cap of $118,500 and those with a significantly greater income will be paying the same amount in payroll taxes; therefore, the taxpayer with the lower income will be giving a greater percentage of their income to government. Although regressive and proportional taxes do exist in the U.S., the majority of taxes in the United States do work towards the goals of creating a primarily progressive system of taxation in this

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