Taxes - Drobac

Taxes

Three general types of taxes:
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1. Progressive Tax - Marginal Tax Rate
The rich hate this tax structure - the income tax rate increases as income increases
Example:
a person with gross income of $10,000 might be at a 15% tax rate.
a person with gross income of $20,000 might be at an 18% tax rate.
a person with gross income of $50,000 might be at a 26% tax rate
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2. Proportional Tax - Percentage Tax Rate - Average Tax Rate
If the individual income tax rate is 10%, all tax payers pay 10% of their gross income to the IRS, no matter the income level.
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3. Regressive Tax - Flat Tax
Hurts the poor the most - the wealthy love this tax - a sales tax is a regressive tax - it hurts the poor because the poor will pay a larger percentage of their income in taxes
Examples: gasolene taxes, taxes on clothing, utility taxes, etc.
Another example - the so called Stadium Tax defeated in the 1997 election by tax payers in the 8 county Pittsburgh Metropolitan Area was an example of a regressive tax.

This page is considered a perpetual construction site.

If you have any comments or information that you might like added to this page, please e-mail the typed information to:

Nikola (Nick) Drobac

drobac@mailcity.com

Information may be edited before posting.