A tax system in which the tax rate on everyone's first $10,000 of income is 10 percent, the tax rate on everyone's second $10,000 of income is 15 percent, and the tax rate on all income over $20,000 is 25 percent is a(n):
A) proportional tax.
B) equitable tax.
C) progressive tax.
D) unit tax.

Question

Quizplus · Accepted Answer

This tax system is progressive because as income increases, the tax rate also increases. The higher rate on the higher income brackets means those with more income will pay a larger percentage of their income in taxes, which is a characteristic of progressivity. This is not a proportional tax because the rate changes based on income level. It is also not an equitable tax because it does not treat all taxpayers the same. Finally, it is not a unit tax because it is based on income, not a specific amount per unit of goods or services.

A Tax System in Which the Tax Rate on Everyone's