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In Social Studies, high school students learn about progressive taxes, regressive taxes, and income tax structures.
Progressive tax is a tax where the tax rate increases as the taxable base amount increases, aiming to reduce the tax burden on lower-income individuals and shift it to those with higher incomes. An example is when a tax system divides earners into brackets, with each bracket paying a different tax rate based on income levels.
Regressive tax, on the other hand, is a tax system where poorer families pay a higher tax rate, which some argue includes sales tax. In a regressive tax system, lower-income individuals end up paying a higher proportion of their income in taxes compared to higher-income earners.
Income tax can be structured as regressive, proportional, or progressive, with most current systems being progressive, meaning higher-income individuals are taxed at higher rates.
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