An important aspect of many taxation systems is what’s referred to as a ‘progressive rate’. When you look at the tax rates, you’ll see that those countries are using a ‘bracket system’. Different categories, or ‘brackets’, are employed, each having its own tax rate. In short, the more income you earn, the more tax you pay. The progressive rate is designed to distribute tax more equitably, so that those with higher incomes pay a larger portion of their income in taxes than those with lower incomes. But how exactly does this work?