Discuss the view that the best way to achieve greater equity in the distribution of income in a country is to use a progressive tax system

Equity in the distribution of income is one of the four government macroeconomics objectives. It’s the concept that every income groups in a nation have less different and similar income. Progressive tax is a tax type where the percentage of tax changes when the income increases.Compared to other tax type such as proportional tax, where the same percentage is taken from every income classes, progressive tax system benefits the poor compared to the wealthier; Revenues of wealthier person are higher. So, the tax rate increases, and a bigger part is payed to the government. The disposable income decreases. In the other hand, the income of poor people is relatively low compared to other and so, the tax rate decreases, there is a fewer part that is payed to the government and disposable income increases.If the country is considered as “wealthy” and people incomes are very high, it benefits the government because the taxes will be higher, and so, government revenues will increase.Using progressive taxes have different advantages and disadvantages. Firstly, progressive taxes prevent political and social instability by limiting the gap between classes. Indeed, by getting very high-income gaps, the wealthier people might stay only with the other wealthier and, in addition to the income gaps, new gaps will be created such as political and social ones. Also, by using progressive taxes, the governments shift the tax burden to the ones that are the most able to pay.But, using progressive taxes, businesses can feel discouraged to invest and expand, as additional profit is taxed at higher rates, so it can discourage investment and expansion.