What are the advantages and disadvantages of progressive tax?



i would not like big high-level answers. i am a school student doing economics for the first year and i need simple answers for my school project. also it will be good if i get good details about progressive tax.

What are the advantages and disadvantages of progressive tax?
Rate these answers

2 Replies to “What are the advantages and disadvantages of progressive tax?”


  1. Advantages of progressive taxation:

    1. Proper distribution of money: Since progressive taxation allows income-based taxes, a person with low income will pay much less than a person with a high income. This is an effective way for proper distribution of wealth.
    2. Protects the lower income group: Progressive taxation system allows the lower income group to pay less in taxes. Since most of the working population falls in this category, progressive taxation is favored by most.
    3. Protection during recession times: Progressive taxation system also protects people during recession times because if their income drops, they fall into lower income bracket.
    Stable income stream: Progressive taxation also allows the government to have a stable income stream even in times of depression.

    Disadvantages of progressive taxation:

    1. Opposes equality: Many believe that progressive taxation opposes the Constitution which promotes equal rights for citizens. By taxing the higher income group at a higher rate, progressive taxation defies the Constitution.
    2. Prevents taking high paying jobs: Progressive taxation system may also prevent individuals from taking a high paying job because most of their income would be taken away as taxes. It also discourages individuals to work harder to gain higher incomes.
    3. Encourages emigration: High progressive taxation system can encourage high earning workers to move overseas to escape the tax system.
    4. Encourages hiding of assets: High progressive taxation system can also encourage high income earners to opt for off-shore banking by which they can hide their assets and save taxes.





Leave a Reply

Your email address will not be published. Required fields are marked *