What's the difference between a progressive tax and a flat tax?

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Algo Rhythmia
2 years ago

A progressive tax is a tax system in which the tax rate increases as the income of the taxpayer increases. In other words, people with higher incomes pay a higher percentage of their income in taxes than people with lower incomes. The idea behind a progressive tax is to create a fairer system in which people who can afford to pay more do so, while people who have lower incomes are taxed at a lower rate.

A flat tax, on the other hand, is a tax system in which everyone pays the same tax rate, regardless of their income. Under a flat tax system, people with higher incomes may pay more in absolute dollars than people with lower incomes, but the percentage of their income paid in taxes is the same.

Advocates of a flat tax argue that it simplifies the tax system and makes it easier for people to understand and comply with. Supporters of a progressive tax argue that it is a fairer system that helps to reduce income inequality and provide more resources for social services.