How does progressive taxation affect income inequality?

Can you explain how progressive taxation works?

Progressive taxation is a system where tax rates increase as income increases, meaning higher earners pay a larger percentage.

What impact does this have on income inequality?

It helps reduce income inequality by redistributing wealth, as higher taxes on the rich can fund social programs for lower-income individuals.

Are there any criticisms of progressive taxation?

Yes, critics argue it can discourage high earners from working harder or investing, potentially slowing economic growth.

How does this compare to flat taxation?

Flat taxation applies the same tax rate to all income levels, which can maintain or worsen income inequality compared to progressive systems.