Progressive income tax rates are consistent with the ability to pay principle of taxation but are inconsistent with the tax criterion of economic efficiency.

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Progressive income tax rates are based on the ability to pay principle, which means that those who have a higher income are expected to contribute a greater proportion of their income in taxes than those with a lower income. This principle is based on the idea that those with higher incomes have a greater ability to pay taxes without experiencing significant hardship. However, some argue that progressive income tax rates can be inconsistent with the tax criterion of economic efficiency, as they may discourage work and investment by reducing the after-tax return on such activities.

Progressive Income Tax Rates Are Consistent with the Ability to Pay