A:

Those who oppose a progressive tax hierarchy are likely to be those who pay more taxes when such a policy is in place. A progressive tax policy requires individuals with higher incomes and wealth to pay taxes at a rate that is higher than those with lower incomes. It is fair to say that those who are wealthier and with higher incomes oppose such a policy, but this is not always the case.

There are many arguments against such a policy. One is that it divides people into categories that make them unequal. It is also looked at as an unequal way to represent a nation's citizens. Very few people are extremely wealthy, and the majority of people who have power to put representatives in government are in middle class or lower economic positions. The wealthy pay much in terms of money that goes to run the government, but they have very little say because there are so few of them putting representatives into Congress, or the body of government that sets policy in their respective country.

A progressive tax hierarchy sounds as if it may save the poorer money at first since they are not paying nearly as much in taxes; however, opponents argue the opposite is often true and progressive taxes lead to individuals saving less money. Like any policy in government that influences fiscal policy, taxes are complicated and never black and white. Wealthier individuals find ways to avoid paying more than the government intended, which can lead to less money going toward projects to improve the country.

RELATED FAQS
  1. What is the difference between a regressive tax versus a progressive tax?

    Determine how progressive and regressive taxes impact your personal finances, and learn more about how you pay both types ... Read Answer >>
  2. In what types of economies are regressive taxes common?

    Understand the three main taxation systems, regressive, proportionate and progressive, and learn where regressive tax systems ... Read Answer >>
Related Articles
  1. Taxes

    Explaining Progressive Tax

    A progressive tax is a levy in a tax system where the tax rate increases as the taxable base increases.
  2. Taxes

    Understanding Taxes

    Taxes are mandatory fees that individuals and corporations must pay to their governments.
  3. Taxes

    Which Countries Have the Highest Taxes on High Incomes?

    These countries charge the highest taxes on high incomes.
  4. Taxes

    Comparing Regressive, Proportional and Progressive Taxes

    Learn about the basic differences between three common tax systems.
  5. Taxes

    Who Does The Current Tax Code Benefit?

    Are the non-workers benefiting from the current tax code in any way or is it the wealthy who are still getting the big breaks?
  6. Financial Advisor

    3 Federal Income Tax Facts You Didn't Know

    Learn about three federal income tax facts that most Americans may not know from one of the most trusted financial resources on the Web.
  7. Insights

    Fiscal Vs. Monetary Policy Pros & Cons

    When it comes to influencing macroeconomic outcomes, governments have typically relied on one of two primary courses of action: monetary policy and fiscal policy.
  8. Taxes

    What's a Marginal Tax Rate?

    The marginal tax rate is based on a progressive tax system, where tax rates for an individual will increase as income rises. This method of taxation aims to fairly tax individuals based upon ...
  9. Taxes

    How Will Raising Taxes on the 1% Make a Difference?

    What would happen if taxes were raised (even by a small degree) on the highest earners?
RELATED TERMS
  1. Corporate Hierarchy

    Corporate hierarchy is the arrangement of individuals within ...
  2. Tax Rate

    A tax rate is the percentage at which an individual or corporation ...
  3. Benefits Received Rule

    1. A theory of income tax fairness that says people should pay ...
  4. Effective Tax Rate

    The average rate at which an individual or corporation is taxed. ...
  5. Vertical Equity

    A method of collecting income tax in which the taxes paid increase ...
  6. Taxes

    An involuntary fee levied on corporations or individuals that ...
Hot Definitions
  1. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  2. Return On Equity - ROE

    The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability ...
  3. Bond

    A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows ...
  4. Whole Life Insurance Policy

    A life insurance contract with level premiums that has both an insurance and an investment component. The insurance component ...
  5. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  6. Capital Asset Pricing Model - CAPM

    A model that describes the relationship between risk and expected return and that is used in the pricing of risky securities. ...
Trading Center