Income_Taxes[1][1]

Income_Taxes[1][1] - Income Taxes 3 Main Tax Types...

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Income Taxes
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3 Main Tax Types Progressive Regressive Proportional
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Definition of Taxes Progressive A progressive tax is a tax by which the tax rate increases as the taxable amount increases. "Progressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from low to high, where the average tax rate is less than the marginal tax rate. It can be applied to individual taxes or to a tax system as a whole; a year, multi-year, or lifetime. Progressive taxes attempt to reduce the tax incidence of people with a lower ability-to-pay, as they shift the incidence disproportionately to those with a higher ability-to-pay. http://en.wikipedia.org/wiki/Progressive_tax
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Progressive Tax The term is frequently applied in reference to personal income taxes, where people with more disposable income pay a higher percentage of that income in tax than do those with less income. It can also apply to adjustment of the tax base by using tax exemptions, tax credits, or selective taxation that would create progressive distributional effects. For example, a sales tax on luxury goods or the exemption of basic necessities may be described as having progressive effects as it increases a tax burden on high end consumption or decreases a tax burden on low end consumption respectively. A tax that takes a larger percentage of income from high- income groups than from low-income groups. http://en.wikipedia.org/wiki/Progressive_tax
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Regressive A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases. In simple terms, it imposes a greater burden (relative to resources) on the poor than on the rich. "Regressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from high to low, where the average tax rate exceeds the marginal tax rate. It can be applied to individual taxes or to a tax system as a whole; a year, multi-year, or lifetime. Regressive taxes attempt to reduce the tax incidence of people with higher ability-to-pay, as they shift the incidence disproportionately to those with lower ability-to-pay. The opposite of a regressive tax is a progressive tax, where the tax rate increases as the amount subject to taxation increases. In between is a proportional tax, where the tax rate is fixed as the amount subject to taxation increases. Definition of Taxes Cont. http://en.wikipedia.org/wiki/Regressive_tax
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Regressive Tax The term is frequently applied in reference to fixed taxes, where every person has to pay the same amount of money. The regressively of a particular tax often depends on the propensity of the tax payers to engage in the taxed activity relative to their income. In other words, if the activity being taxed is more likely to be carried out by the poor and less likely to be carried out by the rich, then the tax may be considered regressive. To determine whether a tax is regressive, the i ncome-elasticity of the good being taxed as well as the income-
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This note was uploaded on 04/09/2012 for the course BUSINESS LU124475 taught by Professor Prof.johns during the Spring '09 term at Liberty.

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Income_Taxes[1][1] - Income Taxes 3 Main Tax Types...

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