Progressive taxation
Okay, so let's imagine you have a toy box with different types of toys inside. Some of these toys are worth more than others, like your favorite big toy truck or your fancy Barbie doll. If you were going to sell these toys to your friends, you might charge more money for the big toy truck because it's more valuable than some of the smaller toys. This is similar to how progressive taxation works.
In the adult world, when you start earning money, you are required to pay some of that money to the government. This is called a tax. The government uses this money to pay for things like schools, hospitals, and roads so everybody can use them. But not all people have the same amount of money. Some people earn a lot of money and some people don't earn as much.
This is where progressive taxation comes in. It means that the more money you earn, the higher percentage of your income you pay in taxes. So, if someone earns a lot of money, they will pay a higher percentage of their income in taxes compared to someone who earns less.
Let's use an example to help make this clearer. Imagine there are two people, Eliza and Mark. Eliza earns $20,000 a year, while Mark earns $100,000 a year. The government might decide that Eliza only needs to pay 10% of her income in taxes, while Mark might need to pay 30% of his income in taxes. This means that Eliza would pay $2,000 in taxes while Mark would pay $30,000 in taxes.
The idea behind progressive taxation is that it helps to make things more fair. The people who earn more money pay a higher percentage of their income in taxes because they can afford it more than people who earn less money. This way, everyone can still have access to things like schools, hospitals, and roads, regardless of how much money they earn.
So, just like charging more money for your big toy truck because it's worth more, the government charges more money in taxes depending on how much someone earns. This helps make sure everyone gets what they need, no matter how much money they have.
In the adult world, when you start earning money, you are required to pay some of that money to the government. This is called a tax. The government uses this money to pay for things like schools, hospitals, and roads so everybody can use them. But not all people have the same amount of money. Some people earn a lot of money and some people don't earn as much.
This is where progressive taxation comes in. It means that the more money you earn, the higher percentage of your income you pay in taxes. So, if someone earns a lot of money, they will pay a higher percentage of their income in taxes compared to someone who earns less.
Let's use an example to help make this clearer. Imagine there are two people, Eliza and Mark. Eliza earns $20,000 a year, while Mark earns $100,000 a year. The government might decide that Eliza only needs to pay 10% of her income in taxes, while Mark might need to pay 30% of his income in taxes. This means that Eliza would pay $2,000 in taxes while Mark would pay $30,000 in taxes.
The idea behind progressive taxation is that it helps to make things more fair. The people who earn more money pay a higher percentage of their income in taxes because they can afford it more than people who earn less money. This way, everyone can still have access to things like schools, hospitals, and roads, regardless of how much money they earn.
So, just like charging more money for your big toy truck because it's worth more, the government charges more money in taxes depending on how much someone earns. This helps make sure everyone gets what they need, no matter how much money they have.
Related topics others have asked about: