Editing Income distribution (section)

=== Taxes ===
The progressive income tax takes a larger percentage of high incomes and a smaller percentage of low incomes. Effectively, the poorest pay the least of their earned incomes on taxes which allows them to keep a larger percentage of wealth. Justification can be illustrated by a simple heuristic: The same dollar amount of money (e.g. $100) has a greater economic impact on only one party—the poor. That same amount has little economic impact on a wealthy individual, so the disparity is addressed by ensuring the richest individuals are taxed a greater share of their wealth. The state then uses the tax revenue to fund necessary and beneficial activities for the society at large. Every person in this system would have access to the same social benefits, but the rich pay more for it, so [[progressive tax]] significantly reduces the inequality.