Authors libby rittenberg 808
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2007 adjusted gross income
(family of four)
Personal income tax rate applied
to bracket
income credit)
$24,300–$88,000
15%
$88,000–152,800
25%
$152,800–$220,150
28%
$220,150–$374,000
33%
Greater than $374,000
35%
The federal income tax is progressive. The percentage tax rate rises as
adjusted gross income rises.
While a pure flat tax would be proportional, most proposals for such a tax
would exempt some income from taxation. Suppose, for example, that
households paid a “flat” tax of 20% on all income over $40,000 per year.
This tax would be progressive. A household with an income of $25,000 per
year would pay no tax. One with an income of $50,000 per year would pay
a tax of $2,000 (.2 times $10,000), or 4% of its income. A household with
an income of $100,000 per year would pay a tax of $12,000 (.2 times
$60,000) per year, or 12% of its income. A flat tax with an income
exemption would thus be a progressive tax.
Benefits Received
An alternative criterion for establishing a tax structure is the benefitsreceived principle, which holds that a tax should be based on the benefits
received from the government services funded by the tax.
Attributed to Libby Rittenberg and Timothy Tregarthen
Saylor URL: />
Saylor.org
808
