Tax rates can be progressive, proportional, or regressive.
A progressive tax rate increases as the taxpayer’s income increases.
• If your tax rate is 10% for your first $10,000 of income, 15% for your next $10,000 of income, and 20% for any income beyond that, that’s a progressive tax
• Higher levels of income are taxed at higher rates
A proportional tax rate remains constant as the taxpayer’s income increases.
• If your tax rate is 10% regardless of your income level, that’s a proportional tax
A regressive tax rate decreases as the taxpayer’s income increases.
• If your tax rate is 10% for your first $10,000 of income, 6% for your next $10,000 of income, and 2% for any income beyond that, that’s a regressive tax
• Higher levels of income are taxed at lower rates
Federal income tax rates in the U.S. are progressive.
If you’re wondering why billionaires pay lower tax rates than some people in the top tax bracket, it’s because a lot of their income is tax-free or taxed at preferential rates.
—
Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education freely available to the world.
—
SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS, PLUS:
• A 23-PAGE GUIDE TO MANAGERIAL ACCOUNTING
• A 44-PAGE GUIDE TO U.S. TAXATION
• A 75-PAGE GUIDE TO FINANCIAL STATEMENT ANALYSIS
• MANY MORE FREE PDF GUIDES AND SPREADSHEETS
* [ Ссылка ]
—
SUPPORT EDSPIRA ON PATREON
*[ Ссылка ]
—
GET CERTIFIED IN FINANCIAL STATEMENT ANALYSIS, IFRS 16, AND ASSET-LIABILITY MANAGEMENT
* [ Ссылка ]
—
LISTEN TO THE SCHEME PODCAST
* Apple Podcasts: [ Ссылка ]
* Spotify: [ Ссылка ]
* Website: [ Ссылка ]
—
GET TAX TIPS ON TIKTOK
* [ Ссылка ]
—
ACCESS INDEX OF VIDEOS
* [ Ссылка ]
—
CONNECT WITH EDSPIRA
* Facebook: [ Ссылка ]
* Instagram: [ Ссылка ]
* LinkedIn: [ Ссылка ]
—
CONNECT WITH MICHAEL
* Twitter: [ Ссылка ]
* LinkedIn: [ Ссылка ]
—
ABOUT EDSPIRA AND ITS CREATOR
* [ Ссылка ]
* [ Ссылка ]
![](https://i.ytimg.com/vi/diEHAyVi5Zs/mqdefault.jpg)