Income tax systems that tax higher income brackets at higher rates are classified as what type?

Income tax systems that impose higher rates on higher income brackets are classified as progressive tax systems. This classification reflects the principle that individuals with greater earning potential contribute a larger percentage of their income to taxes compared to those with lower income levels.

The rationale behind progressive taxation is rooted in the idea that as a person's ability to pay increases, so should their tax liability. This system aims to address income inequality and ensure that those who have the means to contribute more do so, allowing for a fairer distribution of the tax burden.

In contrast, flat tax systems levy the same percentage on all income levels, regressive systems tax lower-income earners at a higher rate relative to their income, and proportional systems apply a constant tax rate across all income levels. The progressive structure helps fund public services and social programs by leveraging the higher earnings of wealthier individuals, thus supporting equity in the tax system.