Why do tax brackets work this way

[tradeunionsupporter]

Why do tax brackets work this way why is it that a Rich/Wealthy person the first few 000 dollars may be taxed at 10% than the next 30 000 dollars is taxed at 20% than over 3 million dollars is taxed may be taxed at 70% why does a Progressive Tax System work this why why can't the rich pay 70% on the first few 000 dollars too is it because than the Working Class would be paying 70% too or am I wrong about this flat rate please help me understand ?


Example

Imagine that there are three tax brackets: 10%, 20%, and 30%. The 10% rate applies to income from $1 to $10,000; the 20% rate applies to income from $10,001 to $20,000; and the 30% rate applies to all income above $20,000.
Under this system, someone earning $10,000 would be taxed at a rate of 10%, paying a total of $1,000. Someone earning $5,000 would pay $500, and so on.
Meanwhile, someone earning $35,000 would face a more complicated calculation. The rate on the first $10,000 would be 10%; the rate from $10,001 to $20,000 would be 20%; and the rate above that would be 30%. Thus, he would pay $1,000 for the first $10,000 of income; $2,000 for the second $10,000 of income; and $4,500 for the last $15,000 of income; in total, he would pay $7,500, or about 21.4%.

http://en.wikipedia.org/wiki/Tax_bracket

[hatzel]

That's just how people organise taxes. It also prevents the problem of...well, if there weren't brackets like this, if the entire income was taxed at some fixed percentage, then somebody earning $10,000 would pay $1,000 tax (10%), leaving them $9,000. Then, somebody earning $10,001 would have to pay a fraction over $2,000 (20%), meaning they would have just over $8,000 left. That is to say, earning an extra $1 would have cost them $1000 in 'real' post-tax wealth, and that's a totally unworkable situation.

It's also worth remembering that the Swedes have been known to put taxes in excess of 100% on the very highest brackets. It would be absolutely stupid to expect somebody earning a few million to actually have to pay their whole paycheck and then some more just to cover their taxes...never in a million years could such a system operate without people kicking up a serious fuss.