Why Progressive Taxation can Aid Economic Growth

[Soleron]

You might want to explain what progressive taxation is and how it links to your company bonus analogy.

But, assuming you mean higher tax % at higher incomes, I agree as long as the tax is actually paid on actual effective income. The current system (in almost all countries) fails not in principle but because there is too much opportunity for tax evasion (on the high-end, because they have better accountants) and disproportionate benefits* (on the low-end). In the end it is the middle class (and by that I mean all people earning enough not to receive tax credits) who pay the real tax.

So I support the progressive tax system as long as people resident of the country, regardless of whatever else, if they earn a penny they pay the stated rate for that income bracket on it.

*By this I mean that, below a certain cutoff in the UK you start to receive so many benefits; tax credits; free bus passes etc. that your effective income is much higher than someone earning a few thousand more on paper. Example: my grandparents saved for their retirement and so now cannot receive pension credit or have their council tax paid for them. They are being punished for good financial judgement. A smooth system with no sharp cutoffs or means-testing would stop this; I;'m not proposing scrapping benefits.