FMA 4 of 5: Progressive taxes and why it is important to the corporate form of business

Progressive taxes and why it is important to the corporate form of business
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Progressive taxes and why it is important to corporate businesses
Progressive taxes are those taxes whose rate increases with an increase in the base of the taxable amount. Progressive in this case illustrates the effect of distribution on expenditure or income, explaining how tax rates progress to high from low. Progressive taxes reduce incidence of tax among people whose ability to pay tax is low and shifts the tax incidence to those whose ability to pay tax is high (Lasher, 2011). This paper seeks to define progressive taxes and why it is important to the corporate form of business.
Progressive taxes are considered as a composite of the entire corporate system due to the interdependent tax variables. Progressive taxes are important to the corporate form of businesses because progressive taxes create a small income distribution that increases business purchasing power. Progressive taxes also ties income taxes to corporate taxes. When the system of income taxes are unprogressive and living costs high, many people will work in any form of jobs to survive. This may not be best for corporate forms of business because there will be low demand with high wages. With the high level of education, corporate businesses are able to access quality working class which increases technological innovations and attracts investments. This leads to economic growth of corporate businesses (Lasher, 2011).
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