If the average tax rate increases as income increases, then the

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Quizplus · Accepted Answer

A progressive tax system is one where the average tax rate increases as income increases, which is the case described in the question. A regressive tax system would have the opposite effect, where the average tax rate decreases as income increases. A proportional tax system would have a constant average tax rate, regardless of income level. The fact that the marginal tax rate is not discussed in the question means that we cannot use it to determine the type of tax system being described. Therefore, the best answer is C, a progressive tax system.

If the Average Tax Rate Increases as Income Increases, Then