If you cross a threshold from 20% to 40%, for every £1000 made over that threshold you pay £400 instead of £200. Sure you are still making more money, but suddenly you don't have that £200 that you could save or invest.
A linear tax would mean a person trying to move up the income ladder is more encumbered by tax for the same amount of tax revenue on a given population.
Your suggestion above that low income workers are exempt from taxes, is a description of a progressive tax.
I’m not really sure I understand what you’re suggesting should be done.
Are you saying that 40% of tax is less than 20% of tax? I don't follow.
My point is that the tax should be linear with tax free allowance. That is everyone pays 20% on income above tax free allowance.
You can call it a progression, but this way anyone can level up if they want to. If you add 40% and more further down the line you are slowing down how people from poor background can improve their living.
For a government to make the same revenue with a linear tax as they do with a progressive tax, this mathematically implies that a tax increase for poorer people and a tax cut for lower people.
Alternatively, you can cut government spending, which normally means cutting services that disproportionately affects the poor.
Either way, moving from a progressive tax to a flat tax is a guaranteed net negative for the poor.
My original point is that corporation do not pay as much tax as they should. The come down from progression should be gradual - as corporate tax holes are plugged, the higher tax rates could be reduced. So that wouldn't affect the poor. It only slightly changes who pays for it.
I think what you're missing here is the alternative to progressive tax is all income is taxed at or close to the existing highest rates, as that is where by a very large margin most tax is collected. Ultimately this leads to those poorest in society suffering the most.
That's true for all taxes, If tax is at 0%, you'll have all the money. Idea is for a person making 20k, tax is going out of food/shelter money, for someone making 100k, it is going out of vacation/investing, for one making millions, it is going out of extra money.
Your suggestion above that low income workers are exempt from taxes, is a description of a progressive tax.
I’m not really sure I understand what you’re suggesting should be done.