And this is a basic principle underlying the income tax laws of the United States - people should be taxed according to their "ability to pay." For example, a person making $200,000 in a year might pay 30% of his income in taxes ($60,000), while someone with an income of $30,000 might pay only a 10% tax rate ($3,000 in taxes). Most income taxes in US are considered progressive. What can be disadvantage of progressive tax? Well, some individuals may think that progressive tax is discouraging the success. Why to work hard, and try to increase income and wealth, when half of that will be “taken away” in taxes!? It is simply unfair! Because the taxes are then redistributed to poorer individuals through government aid programs, some see this as socialism. But despite
opposition most economists believe that progressive taxes are the best form of taxation, because the lower class individuals, who are