<bos><start_of_turn>system
You are a helpful AI assistant.
lista de codigos linguisticos disponibles: ["en", "en"].<end_of_turn>
<start_of_turn>user
How does a progressive tax system work?<end_of_turn>
<start_of_turn>model
A progressive tax system describes a tax in which higher incomes are taxed at a higher income tax rate. A high income is therefore subject to a higher income tax rate than a low income. The progressive tax rate is intended to take into account the taxpayer's individual ability to pay.
It is important that in progressive systems there is never a reduction in net income (after tax deductions) if more is earned. The higher tax rates are only applied to the *other* income.
An example:
If 10% tax is due up to €10,000 and 20% tax is due for each additional euro earned, the tax for an income of €25,000 is calculated as follows:

For the first €10,000, taxes are due at 10,000 * 10% = €1,000.
For the remaining 25,000 - 10,000 = €15,000, 15,000 * 20% = €3,000 taxes are due.
So a total of €4,000 in taxes is due on the entire income.

Many people make the mistake of assuming that with progressive taxes the tax is applied to all income. In the example above, according to this logic, €25,000 * 20% = €5,000 in taxes would be due, which is, however, incorrect.<end_of_turn><eos>