Money in Real Life · 45 sec
Progressive tax
A practical idea for making clearer everyday money decisions.
The useful idea
- The useful idea
A progressive tax is a tax in which the tax rate increases as the taxable amount increases.
- How it works
The term progressive refers to the way the tax rate progresses from low to high, with the result that a taxpayer's average tax rate is less than the person's marginal tax rate.
- Why it matters
The term can be applied to individual taxes or to a tax system as a whole.
Why this matters
Use Progressive tax to compare the trade-offs before committing money.
Try this
Use Progressive tax to compare the trade-offs before committing money.
Test your recall
Which idea belongs to the explanation of Progressive tax?
- The useful idea — correct
- How it works
- Why it matters
A progressive tax is a tax in which the tax rate increases as the taxable amount increases.
General education only — not personal financial advice.