How do progressive taxes impact income inequality globally?.

Progressive taxes are designed so that individuals with higher incomes pay a larger percentage in taxes compared to those with lower incomes. This system aims to reduce income inequality by redistributing wealth and funding social programs. Countries with robust progressive tax systems often see smaller income gaps. For instance, in Sweden, high-income earners contribute up to 60% in taxes, which helps maintain a high standard of living and universal services. Conversely, countries with regressive tax systems may experience greater income disparity, as lower-income individuals pay a higher percentage of their income in taxes. Overall, progressive taxation can be an effective mechanism for addressing economic inequality, fostering social stability, and enhancing public welfare.