In the United States there are progressive US income taxes, a regressive Social Security tax, and a variety of local property taxes, excise taxes, and user fees that are somewhat regressive. Taxpayers over a wide range of income levels end up paying roughly the same percentage of their incomes in taxes. Although no single tax is proportional, the combination of different taxes creates a roughly proportional system. Vertical equity is the concept that people in different income groups should pay different tax rates.

A progressive tax takes a larger percentage of income from high-income groups than from low-income groups and is based on the concept of ability to pay. A progressive tax system might, for example, tax low-income taxpayers at 10 percent, middle-income taxpayers at 15 percent and high-income taxpayers at 30 percent. The U.S. income tax is based on the progressive tax system.

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Understanding US Income Taxes!