Taxing a rich person(s) income has no affect on that person hiring employees or expanding business. It does, though, have an affect on if said person can buy a second large house or not. It also affects how much money that person can spend in the stock market, to grow his own personal net worth.
Supporting the corporate tax is what prevents businesses to grow and create more jobs. And the corporate tax is a different animal than the progressive tax. Getting rid of the corporate tax, but keeping the progressive tax is something that could benefit income inequality greatly.
People argue that the wealthy would cut jobs because their personal income tax are raised simply doesn't make sense. Personal taxes are not equivalent to corporate taxes meaning how much the wealthy are taxed determines weather or not the CEO gets an ice sculpture for his daughters wedding or more traditional center pieces. The rich do not stimulate the economy, their multimillionaire net worth's are made of money unspent. The idea of trickle down is corrupt to the core and this is obvious to our European neighbors
The title says it all. HONESTLY, WHY WOULDN'T IT??? It does not create a disincentive to work. You honestly think humanity has so little ambition as to not realize it just to not pay taxes??? More progressive tax=more welfare. More welfare=more spending. More spending=more money. More money=more jobs and taxes. Honestly, it is so simple I just cannot understand how to deny it.
In order for a society to provide better for its poor, hungry, and downtrodden, the progressive tax is a better option. People at the bottom and lower income levels get more government services while paying little or no taxes, and the most able to pay class pays more taxes while using fewer services.
If taxes on the rich are raised, they have to compensate for lost profits (or added losses).
This can be done by reducing the pay of or firing employees, raising prices and reducing the quality of their goods and services, ignoring regulations and evading taxes, or at worst shutting down their business. This has negative effects on the rest of society, having little effect on inequality while reducing everyone's income.
Also, many government services such as public education and means tested welfare have contributed to poverty.
Higher taxes on the rich means they have to compensate for lost profits.
They can do this by firing workers, raising prices, reducing the quality of their goods/services, ignoring regulations and evading taxes, or at worst, shutting down their business.
This has negative effects on the rest of society and thus as well as having little effect on income inequality, it reduces everyone's income.
No, the progressive tax does not combat income inequality, because the progressive tax creates a disincentive to work. If people know they will be taxed more if they earn more, they will be less likely to work. If they cannot keep what they earn, they will not want to expand their businesses and hire new workers. The GDP will not grow and everyone will suffer.