Progressive taxation

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Progressive taxation is a form of taxation where the rates of tax paid increase as income increases. This form of taxation is generally preferred by liberals because it leads to an increased income equality. Conservatives generally argue that at its most extreme it is simply a form of income redistribution and class warfare.

Arguments in favour of increased taxation on wealthier members of society include an increased ability to pay and the fact that the wealthy have more to gain from protection from the destruction of society from internal or external forces. On the other hand, progressive taxation stifles economic progress because it reduces the incentive for people to work harder and create wealth.

It deserves note that Adam Smith, an early proponent of laissez-faire economy, suggested that small amounts of progressive taxation could be beneficial to society whereby the rich are taxed more heavily than the poor. The name is a technical economic term and has nothing to do with causing progress.

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