The federal income tax is a progressive tax because the tax amount is charged according to the income of the person. The rich will pay the tax according to him or her, and the poor will pay the tax less according to their income.
Further Explanation:
The progressive tax is a tax that increases based on the income earned by the person. The poor will pay less tax than the richer ones.
The federal tax system is a progressive system in which the tax is levied on the basis of the income of the person. Huge tax is collected from rich people, and comparatively very less tax is collected from the poor ones. This will bring economic balance and economic growth in the country or society. People will pay the tax according to their income. The poor will get the benefit of some amount of tax relaxation as they earn less and will have to pay less tax than the richer ones.
Learn More:
1. Tax from selling property
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2. State income tax
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3. Personal taxation
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Answer Details:
Grade: Senior school
Chapter: Taxation
Subject: Business studies
Keywords: Why is the federal income tax a progressive tax, economic growth, economic balance, help poor people, based on their income, progressive tax, federal tax is collected on the basis of the income of the person.
