What Type of Taxation Prevails in The United States
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The US taxation system is progressive in nature, and a progressive tax system can be defined as the system in which income percentage that tax payer pays in tax rises when the income of tax payer increase. In the progressive tax system, the person who has higher incomes has to pay more amount in taxes and at the same time, they are also required to pay increased rate of tax. The fundamental of the progressive taxation system is this. The best example of this is, a person is earning $100,000 annually might pay the 25% of his income in taxes that is $25,000. On the other hand, if someone has the income of $30,000, the person might have to pay  the 10% of his income in taxes that is $3,000.
 This tax system could also be proportional or regressive. The regressive tax system is opposite to progressive tax system. In this system, a person’s income paid in taxes decreases as his income increases. The simple meaning of proportional tax is everyone has to pay the same tax rate no matter what their income is. This type of tax system displays component of multiple approaches.
In the United States, as well as many other countries, there is a progressive taxation system and this is so because of many reasons. The fundamental of this tax system is those who are earning high should contribute more in the income taxes as they are willing to pay more without sacrificing any important things.
According to this concept, the people with higher income can afford things of basic necessity easily, and when it comes to saving, they spend on home, second homes, luxury, cars etc. On the other hand, a person earning low spend on things of his/her basic necessities, it could be  the medical care, education for children, vehicle repairs and safety, etc.
Reasons Why US Has Prograssive Tax System
The US tax system is progressive and there are many reasons for many number of reasons such as : the type of tax work on the concept according to which people who has high income must pay taxes in higher amount as they have more ability to pay without making any critical sacrifices. The progressive tax system allows everyone to spend an equivalent amount on services, goods or investments.
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