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)

	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