Last year you earned $45,000 and paid $9,000 in income taxes. This year you earned $60,000 and paid $15,000 in income taxes. What kind of income tax do you face?

Question

Quizplus · Accepted Answer

This is a progressive tax system because the percentage of income paid in taxes increases as the income increases. Last year, the tax rate was 20% ($9,000/$45,000), and this year it increased to 25% ($15,000/$60,000).

Last Year You Earned $45,000 and Paid $9,000 in Income