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) head tax.
D) unit tax.
E) progressive tax.

Question

Quizplus · Accepted Answer

This tax system is progressive because the tax rate increases as income increases. The first $10,000 is taxed at 10%, which is a lower rate than the 15% tax rate on the next $10,000 of income. And any income above $20,000 is taxed at a higher rate of 25%. This means that people with higher incomes are paying a higher percentage of their income in taxes, which is the hallmark of a progressive tax system.

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