According to principles of taxation, a higher income level leads to a higher rate of tax in which principle?

Progressive taxation is based on the principle that individuals with higher income levels should pay a higher rate of tax. This structure is designed to ensure that the tax burden is distributed more equitably, reflecting an individual's ability to pay. As a person’s income increases, so does the percentage of income that must be paid in taxes. This system aims to reduce economic inequality by imposing a heavier tax load on those who can afford to contribute more to public revenues.

In contrast, regressive taxation often places a larger burden on lower-income individuals, as the tax rate decreases as income increases. Flat tax systems impose a single tax rate on all taxpayers, regardless of income level, while proportional taxation implies that the same percentage of income is taxed regardless of the amount earned. These alternatives do not account for the varying capabilities of individuals to pay taxes based on their income levels. Thus, progressive taxation is specifically tailored to provide a more balanced and fair approach to taxation.