Which of the following is true of progressive tax?

Question

Quizplus · Accepted Answer

Progressive tax means that as income increases, the percentage of tax paid also increases. This is reflected in the marginal tax rate, which is the tax rate paid on the last dollar earned. As income increases, the marginal tax rate also increases. Therefore, option B is correct. The other options are incorrect because: A) People who make more money pay more total taxes, not less. C) The percentage of income paid out increases as income increases, not decreases. D) People who are poor may benefit indirectly from the proceeds of the tax if the revenue is used to fund programs that benefit them, but there is no direct distribution of the tax revenue to the poor. E) The percentage of income paid out decreases as income decreases in a regressive tax system, not a progressive tax system.

Which of the Following Is True of Progressive Tax