Which of the following best describes a progressive tax system?*1 pointAll taxpayers pay the same percentage of their income as taxHigh-income earners pay a smaller percentage of their income than low-income earnersHigh-income earners pay a larger percentage of their income than low-income earnersThe tax rate decreases as the taxpayer's income increases
Question
Which of the following best describes a progressive tax system?*1 pointAll taxpayers pay the same percentage of their income as taxHigh-income earners pay a smaller percentage of their income than low-income earnersHigh-income earners pay a larger percentage of their income than low-income earnersThe tax rate decreases as the taxpayer's income increases
Solution
A progressive tax system is best described as: High-income earners pay a larger percentage of their income than low-income earners.
Here's why:
In a progressive tax system, the tax rate increases as the taxable amount increases. The term "progressive" refers to the way the tax rate progresses from low to high, with the result that a taxpayer's average tax rate is less than the person's marginal tax rate. The term can be applied to individual taxes or to a tax system as a whole.
So, in simple terms, those who make more money are taxed at a higher rate, which is why the statement "High-income earners pay a larger percentage of their income than low-income earners" best describes a progressive tax system.
Similar Questions
How does a progressive taxation system work?A.It makes all citizens pay the same percentage of their income in taxes.B.It makes less wealthy citizens pay a higher percentage of their income in taxes.C.It makes wealthier citizens pay a higher percentage of their income in taxes.D.It requires all citizens to pay all of their income in taxes for redistribution.
Which kind of person would pay a higher rate with a progressive tax?A.A person with a low incomeB.A person with few dependentsC.A person with many dependentsD.A person with a high income
If the richest 10% of people pay 30% of income tax, then the taxation system is progressive.A, Definitely yesDefinitely yesB, Absolutely notAbsolutely notC, Not necessarilyNot necessarily
Define Australia’s progressive tax system.*1 pointThe rate of tax for all individuals is 30 per cent.As individuals earn a higher amount of income, the rate of tax increases.As individuals earn a higher amount of income, the amount of tax decreases.As individuals earn a higher amount of income, the rate of tax decreases.
Taxation that allows higher-income people to pay less of their income on taxes than lower-income people is called:A.regressive taxation.B.proportional taxation.C.progressive taxation.D.indirect taxation.
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