Are direct taxes typically classified as progressive or proportional taxes?

Direct taxes are typically classified as progressive taxes. Progressive taxes are those where the rate of taxation increases as the taxable amount increases, meaning that individuals with higher incomes pay a larger percentage of their income in taxes compared to those with lower incomes. This classification reflects the principle of equity in taxation, aiming to reduce income inequality by placing a higher tax burden on those who can afford it.

Proportional taxes, on the other hand, have a constant tax rate regardless of income level. This structure means that every taxpayer pays the same percentage of their income, which does not account for the varying abilities to pay among different income groups.

Thus, the classification of direct taxes as progressive highlights their role in promoting social equity, making them distinct from proportional tax systems that treat all income levels the same.