In a progressive tax system the average tax rate paid rises as income rises. In the United States, large standard deductions and marginal rates that begin at 10% and climb to 35% (for people earning more than $373,651 in 2010) make the tax code progressive. However, other elements of the tax code are regressive, falling as income rises. For example, the payroll tax that funds the Social Security and Medicare programs applies a high rate to only the first $106,800 earned. According to the Congressional Budget Office, the United States tax code is progressive; in 2007, the bottom fifth of the income distribution paid 4.0% of their income in all federal taxes while the average tax rate for the top fifth was 25.1%.
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In business there are many key concepts and terms that are crucial for students to know and understand. Often it can be hard to determine what the most important business concepts and terms are, and even once you’ve identified them you still need to understand what they mean. To help you learn and understand key business terms and concepts, we’ve identified some of the most important ones and provided detailed definitions for them, written and compiled by Chegg experts.