A progressive tax places higher tax rates on people with higher incomes. This means that as someone's income increases, the percentage of their income that goes towards taxes also increases. This is intended to make the tax system more equitable, as those with higher incomes have more ability to pay taxes without impacting their basic needs.

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A Progressive Tax

Question 106

Multiple Choice

A progressive tax:

A) is the tax rate paid on an additional dollar of income.
B) places higher tax rates on people with higher incomes.
C) equals the total tax payment divided by total income.
D) is a separate income tax code that began in 1969 to prevent the rich from not paying income taxes.

Correct Answer: