The Disparity in Taxation between Wealthy Individuals and the Middle Class

Wealthy individuals often pay a lower percentage of taxes relative to their income compared to middle-class earners due to structural differences in tax systems. Historical taxation practices have evolved, with many countries reducing tax rates for high net worth individuals, which has paradoxically led to an increase in overall tax contributions. This trend is because the wealthy have the means to relocate to jurisdictions with more favorable tax conditions, highlighting how tax policy can influence migration patterns. Consequently, countries must balance tax incentives for attracting capital and maintaining equity among their citizens.