Give advantages of progressive tax

A progressive tax involves a tax rate that increases (or progresses) as taxable income increases.

It imposes a lower tax rate on low-income earners and a higher tax rate on those with a higher income. This is usually achieved by creating tax brackets that group taxpayers by income ranges.

Give any two merits of progressive tax over proportional tax

• Reduces income inequality
• Increases government revenue
• Reduces social tension between the poor and the rich
• Encourage hard work
• Increases consumption of goods especially by the low income earners.