If people with higher incomes pay a higher percentage of income in taxes, the income tax structure is ?
Correct answer: A. progressive
- A. progressive
- B. regressive
- C. value added taxes (VAT)
- D. excise taxes
Explanation
A progressive income tax takes a larger percentage of income as income rises. A regressive structure does the opposite, making the tax burden proportionally heavier for 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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