A progressive income tax means that those with a higher income pay ?
Correct answer: A. a higher percentage of their income in taxes then low income people
- A. a higher percentage of their income in taxes then low income people
- B. a lower percentage of their income in taxes than low income people
- C. the same percentage of their income in taxes as low income people all the taxes in the economy.
- D. all the taxes in the economy
Explanation
Under a progressive income tax, the average tax rate rises as income rises. Higher-income people therefore pay a larger percentage of their income in tax than lower-income people.
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About Public Finance
Government revenue and expenditure are analysed through taxation, public borrowing, budgets, subsidies, transfers and public debt. The topic explains how fiscal policy affects resource allocation, income distribution, economic stability and growth, while distinguishing direct from indirect taxes, progressive from regressive taxation, and public goods from goods supplied by private markets.
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