Incremental tax,

Definition of Incremental tax:

1. Incremental tax describes a tax system in which the tax percentage that a person pays increases based on their income level. This is also called a progressive income tax or a marginal rate tax.

2. Incremental increases in a tax that are based upon a taxpayers income level. Typically, as income gets higher, the tax rate will increase - especially for those in upper income brackets. This type of tax could actually have a negative effect on the profit received from some investments.

3. In an incremental tax system, those with higher incomes pay a larger portion of the taxes collected by the state, and therefore contribute more to a state’s revenue than those with lower incomes.

How to use Incremental tax in a sentence?

1. Incremental taxes are also known as progressive taxes.
2. These taxes are incremental because they increase the tax you pay on greater increments of income.
3. Incremental taxes are also known as redistributive taxes.