Progressive taxation is a tax system in which higher-income people pay a larger percentage of their income.
Under a progressive schedule, the effective tax rate rises as taxable income increases. Tax brackets are often used to apply different marginal rates to successive portions of income. A person does not normally pay the highest marginal rate on every unit of income merely because some income enters that bracket.
Progressive taxation is distinct from proportional taxation, in which the same percentage applies at every income level, and regressive taxation, in which the effective burden falls as income rises. A tax can be progressive, proportional, or regressive depending on how its burden compares across income groups.
Governments use progressive taxes to raise revenue and may also pursue redistribution. The overall effect depends on deductions, credits, exemptions, payroll taxes, consumption taxes, and transfers, not only on the headline income-tax rates.