QUESTION = Why do we use an tiered income tax system, instead of something more precise (like an integral-based tax)?

GENERATION = The reason is because there are several things in an X-tax that are not basic. Income itself is not base (income from work) but instead the larger amount of "payroll" required to operate the government's taxes (i.e. how much tax should be collected each year to pay for our infrastructure, infrastructure for our schools, infrastructure for our police, health care, defense, our roads, etc.) Additionally, regressive tax requires a more complex set of calculations to get an accurate assessment of how much people should pay in taxes and which percentage is realistic to actually pay, and hence has less tax revenue on top of the $2k+ you have taxed today, so it is a more sensible method to just create an entire different scheme for everyone who pays based on their income and that would bring us closer to the true tax brackets. 

RETRIEVAL #0 = Income tax---tax system can be properly called progressive. The higher costs to labour and capital imposed by income tax causes deadweight loss in an economy, being the loss of economic activity from people deciding not to invest capital or use time productively because of the burden that tax would impose on those activities. There is also a loss from individuals and professional advisors devoting time to tax-avoiding behaviour instead of economically-productive activities. Section::::Around the world. Income taxes are used in most countries around the world. The tax systems vary greatly and can be progressive, proportional, or regressive, depending on the type of tax. Comparison of tax rates around the world is a difficult and somewhat subjective enterprise. Tax laws in most countries are extremely complex, and tax burden falls differently on different groups in each country and sub-national unit. Of course, services provided by governments in return for taxation also vary, making comparisons all the more difficult. Countries that tax income generally use one of two systems: territorial or residential. In the territorial system, only local incomeincome from a source inside the country – is taxed. In the residential system, residents of the country are taxed on their worldwide (local and foreign) income, while nonresidents are taxed only on their local income. In addition, a very small number of countries, notably the United States, also tax their nonresident citizens 

RETRIEVAL #1 = Progressive tax---kept the progressive income tax, and extended it to cover the costs of the Crimean War. By the 1860s, the progressive tax had become a grudgingly accepted element of the English fiscal system. In the United States, the first progressive income tax was established by the Revenue Act of 1862. The act was signed into law by President Abraham Lincoln, and replaced the Revenue Act of 1861, which had imposed a flat income tax of 3% on incomes above $800. The Sixteenth Amendment to the United States Constitution, adopted in 1913, permitted Congress to levy all income taxes without any apportionment requirement. By the mid-20th century, most countries had implemented some form of progressive income tax. Section::::Measuring progressivity. Indices such as the Suits index, Gini coefficient, Kakwani index, Theil index, Atkinson index, and Hoover index have been created to measure the progressivity of taxation, using measures derived from income distribution and wealth distribution. Section::::Measuring progressivity.:Marginal and effective tax rates. The rate of tax can be expressed in two different ways; the "marginal rate" expressed as the rate on each additional unit of income or expenditure (or last dollar spent) and the "effective (average) rate" expressed as the total tax paid divided by total income or expenditure. In most progressive tax systems, both rates will rise as the amount 

RETRIEVAL #2 = Tax---Mirrlees optimal income tax is a detailed theoretical model of the optimum progressive income tax along these lines. Over the last years the validity of the theory of optimal taxation was discussed by many political economists. Section::::Theories.:Rates. Taxes are most often levied as a percentage, called the "tax rate". An important distinction when talking about tax rates is to distinguish between the marginal rate and the effective tax rate. The effective rate is the total tax paid divided by the total amount the tax is paid on, while the marginal rate is the rate paid on the next dollar of income earned. For example, if income is taxed on a formula of 5% from $0 up to $50,000, 10% from $50,000 to $100,000, and 15% over $100,000, a taxpayer with income of $175,000 would pay a total of $18,750 in taxes. Section::::See also. BULLET::::- Advance tax ruling BULLET::::- Excess burden of taxation BULLET::::- Fiscal capacity BULLET::::- Fiscal incidence BULLET::::- Government budget balance BULLET::::- International taxation BULLET::::- List of taxes BULLET::::- Price ceiling BULLET::::- Price floor 

RETRIEVAL #3 = Tiered Internet service---Tiered Internet service Tiered service structures allow users to select from a small set of tiers at progressively increasing price points to receive the product or products best suited to their needs. Such systems are frequently seen in the telecommunications field, specifically when it comes to wireless service, digital and cable television options, and broadband internet access. When a wireless company, for example, charges customers different amounts based on the number of cellphone voice minutes, text messages, amount of data and other features they desire, the company is utilizing the principle of tiered service. This is also seen in charging different prices for services such as the speed of one's internet connection and the number of cable television channels one has access to. Tiered pricing allows customers access to these services who may not otherwise due to financial constraints, ultimately reflecting the diversity of consumer needs and resources. Tiered service helps to keep quality of service standards for high-bandwidth applications like streaming video or VoIP. This comes at a cost of increasing costs for better service levels. Major players in the net neutrality debate have proposed tiered internet so content providers who pay more to Internet service providers get better quality service. Section::::History. It was not until the Internet began its rapid evolution that tiered services became a controversial issue. And it was not until the early 2000s that 

RETRIEVAL #4 = Dual income tax---Dual income tax The dual income tax system levies a proportional tax rate on all net income (capital, wage and pension income less deductions) combined with progressive tax rates on gross labour and pension income. This implies that labour income is taxed at higher rates than capital income, and that the value of the tax allowances is independent of the income level. The dual income tax system deliberately moves away from the comprehensive income tax (global income tax) system which taxes all or most (cash) income less deductions (net income) according to the same rate schedule. The dual income tax was first implemented in the four Nordic countries (Denmark, Finland, Norway and Sweden) through a number of tax reforms from 1987 to 1993. The dual income tax is therefore also known as the "Nordic tax system" or the "Nordic Dual Income Tax". Section::::History. The dual income tax was first proposed by the Danish economist Niels Christian Nielsen in 1980. He suggested that the comprehensive income tax should be replaced by a system involving a flat rate of tax on capital income - at the level of the corporate income tax rate - combined with progressive taxation of the taxpayer's total income from other sources. The proposal was taken up by a committee appointed by the Savings Bank Association ("Sparekasseforeningen") that in the early 1980s prepared a discussion paper for 

RETRIEVAL #5 = Progressive tax---labor. According to IMF, some advanced economies could increase progressivity in taxation for tackling inequality, without hampering growth, as long as progressivity is not excessive. Fund also states that the average top income tax rate for OECD member countries fell from 62 percent in 1981 to 35 percent in 2015, and that in addition, tax systems are less progressive than indicated by the statutory rates, because wealthy individuals have more access to tax relief. Section::::Economic effects.:Educational attainment. Economist Gary Becker has described educational attainment as the root of economic mobility. Progressive tax rates, while raising taxes on high income, have the goal and corresponding effect of reducing the burden on low income, improving income equality. Educational attainment is often conditional on cost and family income, which for the poor, reduces their opportunity for educational attainment. Increases in income for the poor and economic equality reduces the inequality of educational attainment. Tax policy can also include progressive features that provide tax incentives for education, such as tax credits and tax exemptions for scholarships and grants. A potentially adverse effect of progressive tax schedules is that they may reduce the incentives for educational attainment. By reducing the after-tax income of highly educated workers, progressive taxes can reduce the incentives for citizens to attain education, thereby lowering the overall level of human capital in an economy. However, this effect can be mitigated by 

RETRIEVAL #6 = Optimal tax---consumption may be quite small, while the adverse effects on income distribution may be large. Section::::Tax revenue.:Lump-sum taxes. One type of tax that does not create a large excess burden is the lump-sum tax. A lump-sum tax is a fixed tax that must be paid by everyone and the amount a person is taxed remains constant regardless of income or owned assets. It does not create excess burden because these taxes do not alter economic decisions. Because the tax remains constant, an individual's incentives and a firm's incentives will not fluctuate, as opposed to a graduated income tax that taxes people more for earning more. Lump-sum taxes can be either progressive or regressive, depending on what the lump sum is being applied to. A tax placed on car tags would be regressive because it would be the same for everyone regardless of the type of car the owner purchased and, at least in the United States, even the poor own cars. People earning lower incomes would then pay more as a percentage of their income than higher-income earners. A tax on the unimproved aspects of land tends to be a progressive tax, since the wealthier one is, the more land one tends to own and the poor typically do not own any land at all. Lump-sum taxes are not politically expedient because they sometimes require a complete overhaul of the