What aspect of the Universal Social Charge makes it different from other taxes?

The Universal Social Charge (USC) is distinct from other taxes primarily because it is based on gross earnings and is designed to be progressive. This means that individuals with higher incomes pay a larger percentage of their earnings in tax compared to those with lower incomes. Unlike some taxes that might be flat rates or applied only to specific groups, the USC applies to a broad range of income types and is calculated using the total earnings before any deductions are made.

This characteristic of being progressive is crucial as it aligns with the principle of ability to pay, ensuring that those who can afford to contribute more to public finances do so. Furthermore, the application on gross earnings allows for a broader tax base, helping to fund public services effectively.

Other options mentioned do not accurately reflect the nature of the USC. For example, the tax does not only affect self-employed individuals, nor is it limited to net earnings. It also isn’t a national sales tax, which typically applies to the sale of goods and services rather than personal income. This understanding of the USC is vital in appreciating how different taxation strategies can address income inequality and fund societal needs.