John Gates made $25,000 last year and paid taxes on this income of $1,500.Jane Smith made $30,000 last year and paid taxes on this income of $3,000.What type of tax is the government using?

Question

Quizplus · Accepted Answer

The government is using a progressive tax, as the percentage of income paid in taxes increases as income increases. John Gates paid 6% of his income in taxes ($1,500/$25,000) while Jane Smith paid 10% of her income in taxes ($3,000/$30,000). This shows that the higher income earner is paying a higher percentage of their income in taxes.

John Gates Made $25,000 Last Year and Paid Taxes on This