Progressive Taxation Briefings
Progressive taxation means higher tax rates for people who earn or have more wealth and is a clear example of progressivity. Regressive taxation means poor people paying a greater proportion of their available resources than the rich and consumption taxes using a flat rate are clear examples.
Taxes can become more progressive by using well-designed thresholds to determine who has enough to pay a particular tax and exemptions and the system overall can be progressive when different rates are applied to different taxes. A mix of progressive taxes with high rates and relatively low-rated consumption taxes aimed at producing a more progressive system are detailed in these briefings.
The briefings cover generally-regressive taxes that can and should be reformed, such as consumption taxes such as value-added tax (VAT), excise taxes, international trade taxes, and taxes on the informal sector, as well as taxes that are usually progressive such as property tax, capital gains tax and wealth taxes - including inheritance tax. Each briefing defines the type of tax, discusses its current application, outlines its challenges and benefits, gives examples of how it has been used and recommends how it could be better applied or reformed.