If the tax rate for a single person with $25,000 in taxable income is 24 percent, and the tax rate for a single person with $20,000 in taxable income is 20 percent, the tax rate over this income range is
(A) regressive
(B) progressive
(C) proportional
(D) revenue-neutral
Answer:
Option (B) is correct.
A progressive tax rate is one in which the tax rate increases as
income rises. In this example, someone earning $25,000 a year is taxed at a higher rate than
someone earning a lower income; thus, the tax rate is progressive.
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