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Question
types of taxes in the united states
s break down into two basic types: progressive taxes and regressive taxes, which may
popular but are important for funding the government.
ressive taxes
that change based on a persons income
income tax
- rates are determined by tax brackets (level of income)
- rate increases as a persons income increases
- rate decreases if a person has a lower income
gressive taxes
taxes that stay the same for everyone regardless of income
- often passed by legislatures
- sales tax
- e.g. a percentage - based tax on all retail purchases
- sin tax
- tax on an item deemed harmful to stop people from using it, e.g. tobacco and alcohol
taxes
- often used to fund a related public project, such as public health initiatives
- property tax
- two houses in the same jurisdiction will be taxed at the same percentage
sin taxes are designed to do what?
- convince people to donate more money
- convince people to work more
- convince people to stop buying a good
Sin taxes are a type of regressive tax applied to goods deemed harmful (like tobacco or alcohol). Their core purpose is to discourage consumption of these products by making them more expensive.
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convince people to stop buying a good