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.
Question
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.
Solution
A progressive taxation system works by making wealthier citizens pay a higher percentage of their income in taxes. So, the correct answer is C. Here's a step-by-step explanation:
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In a progressive tax system, the tax rate increases as the taxable amount increases.
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The system is designed to place the tax burden on those who can afford to pay more, i.e., the wealthier citizens.
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For example, a person who earns 100,000 might be taxed at a rate of 20%.
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This means that the person earning 10,000.
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Therefore, a progressive tax system does not make all citizens pay the same percentage of their income in taxes, nor does it make less wealthy citizens pay a higher percentage. It also does not require all citizens to pay all of their income in taxes for redistribution.
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Instead, it makes wealthier citizens pay a higher percentage of their income in taxes.
Similar Questions
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
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.
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
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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