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why would the government decide to increase taxes on people with the highest income. (This in...

why would the government decide to increase taxes on people with the highest income. (This in the classical model in a closed economy.)

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Ans. In proportional taxation meachanism the taxing authority charges the same tax amount from all the taxpayers irrespective of income . this caused inequility in the economy both poor and rich had to pay equal amount of taxes, poor were becoming poorer and rich were becoming richer thats why government decided to change taxation system into progressive one where the taxpayer has to pay their tax share according to their income level. The highest income level people have to pay highest percentage of tax and vica versa.

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