Progressive Tax
A progressive tax charges a higher rate on higher slices of income. U.S. federal income tax is progressive: a person earning $1 million pays a larger share of income in tax than a person earning $100,000. That share is the average tax rate. The marginal tax rate is the rate on the next dollar, and it does not apply to income already earned. A flat tax, also called a proportional tax, charges the same rate at every income level.
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