| TABLE 3 | TYPES OF TAXES AND THEIR ECONOMIC BURDEN | |||
| Type of Tax | Example | Description of Tax Burden | ||
| Progressive | Individual income tax | As income rises, income is taxed at a higher percentage rate when a higher tax bracket is reached. | ||
| Flat | Medicare tax | Medicare tax is 2.9% of all income earned (half of which is paid by employees and half paid by employers). | ||
| Regressive | FICA tax | The FICA tax is a flat tax of 6.2% paid by both employees and employers up to an income cap and is used to fund Social Security. Those earning above the cap will pay a lower overall percentage of income in payroll taxes. | ||