What is a key characteristic of the Universal Social Charge?

The Universal Social Charge (USC) is characterized as a progressive tax based on earnings, which means that individuals with higher incomes pay a larger percentage of their income compared to those with lower earnings. This system is designed to ensure that the tax burden is distributed more equitably, reflecting the ability to pay. As income increases, the rate of tax also increases, thereby addressing issues of income inequality.

In contrast, a flat-rate tax would charge the same percentage regardless of income level, which does not apply to the USC. The USC does not involve property ownership, nor is it limited to foreign income; rather, it encompasses most forms of income earned by individuals residing in the country, including salaries and profits. Thus, the progressive system of the USC is fundamental to understanding its role in the taxation framework, promoting fairness where higher earners contribute a larger share towards public finances.