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Progressivity means that a higher tax rate is assessed on higher income. A proportional tax rate would be the same for all income levels, and a regressive tax would have higher tax rate for lower income. Empirical data shows that income taxes are very close to being proportional in the United States.
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The Personal Income Tax in the United States used to be much more progressive than what it is today. The rate on the highest income bracket was at one time 70%, while the rate on the lowest income bracket was 14%. However, various deductions and exemptions available to high income individuals were reducing their effective tax rate. |
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