A progressive tax takes a larger share of the income of high-income taxpayers than of low-income taxpayers. This is because the tax rate increases as income increases. This is done to promote income equality and to ensure that those who can afford to pay more taxes do so.

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A Progressive Tax

Question 154

Multiple Choice

A progressive tax:

A) takes a larger share of the income of high-income taxpayers than of low-income taxpayers.
B) takes a smaller share of the income of high-income taxpayers than of low-income taxpayers.
C) takes the same share of the income of high-income taxpayers as it does of low-income taxpayers.
D) has no deadweight loss.

Correct Answer: