What is income tax?

   The Income Tax is a direct tax levied by a government upon the income of individuals. As a rule it is collected annually. As a matter of public policy small incomes are exempted. This on the score that the poor have little enough without paying an income tax. The same line of argument that leads to letting off a person of small income altogether prompts the so-called progressive or graduated tax, the rate of which increases as the income increases. As a matter of history it may be stated that an income tax in force in France prior to the French Revolution followed a scale according to which the rate increased as the income diminished. The peasant was required to give up a larger share of his pittance than was taken from the income of the wealthy.