Table 1 Example of 'linear' income tax with a threshold – everybody pays the same percentage (here 25 %) of the income exceeding tax-exempted amount ('threshold', here 10.000)
| Â | Without threshold | With threshold 10 000 | ||
|---|---|---|---|---|
Income | Tax to be paid | % of income | Tax to be paid | % of income |
5 000 | 1 250 | 25 | 0 | 0 |
10 000 | 2 500 | 25 | 0 | 0 |
15 000 | 3 750 | 25 | 1 250 | 8.33 |
20 000 | 5 000 | 25 | 2 500 | 12.50 |
50 000 | 12 500 | 25 | 10 000 | 20.00 |