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New tax structure for Leoni
Transcript of New tax structure for Leoni
What is a progressive tax?
A progressive tax is a type of tax that takes a larger percentage from the income of high-income earners than it does from low-income individuals. Basically, taxpayers are broken down into categories based on taxable income; the more one earns, the more taxes they will have to pay.
What is the tax money used for?
The money from the taxes are part ofthe government fund that supports government spending. With this money the government builds schools and hospitals to ensure the social growth of the country. Another way to ensure stable economic growth is government spending in infrastructure like roads and bridges that will last for several years. Moreover, the government needs to provide public goods like security or parks for the people because if it does not py for them no one will. Furthermore, with the money from the funds the government pys for the salaries of the people that work on the public sector.
Benefits of progressive taxing
Assignment 13 - Tax Structure
To start with a progressive tax system acts as a tool for redistributing income from the upper class to the lower and middle class. Those individuals who earn more pay more into the federal government which reduced the income gap between the rich and the poor.
Secondly, progressive tax allows governments to collect money from those who can afford to pay, and uses it to help create a society that is more happy as a result.
Finally, a progressive system allows governments to collect more money from higher income earners achieving a total amount of money greater than it would be if everyone paid the same.
An example of a country that has a progressive taxing system is the USA. In 2010, individuals who earned up to $8,375 fell into the 10% tax bracket, while individuals earning $373,650 or more fell into the 35% tax bracket. They use this system as a means to redistribute income but some critics of the system believe that it is discriminatory.