us federal income tax rate

us federal income tax rate

Progressive Taxation
Progressive taxation is defined as a form of tax that charges a bigger percentage rate on the income of high income group than it does on the income of low income group. As the income of the individual increases, the tax rate he pays also increases proportionately. So this is a sort of graduated tax. The rationale behind such a taxation principle is that those who earn more can save more and therefore, should pay more to the government.

In the US, according to the treasury department 0.1 percent of the top income group pays 17.4 percent of all the federal tax and 50 percent of the low income group pays only 3.03 percent of all the individual tax. This shows that the US tax system is based on the principle of progressiveness. The main purpose of taxing in this way is to garner revenue for the federal government so that the monies can be utilized for various social, economic and political activities.

Many people argue that the tax system lacks a coherent organizing principle because successive governments very often have brought about frequent legislative amendments to tax laws to please their supporters and certain sections of the society. There are many people who oppose progressive taxation system. They believe that such a tax system should not be applied to all and they have a legal and moral right not to pay taxes. They consider it as illegal and oppressive on the part of the federal government. They argue that only the wealthy should be taxed heavily and those who are engaged in a wide range of tax evasion strategies. On many occasions people have approached the court of law to get the tax laws modified making progressive taxation a matter of hot legal discussion and debate.

us federal income tax rate

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