Suppose a government of LaLa Land imposes the following tax rates on its citizens.
$$\begin{array} { | c | c | }
\hline \text { Income } & \text { Tax Rate } \
\hline \text { below } \$ 30,000 & 9 \% \
\hline \$ 30,001 - \$ 70,000 & 12 \% \
\hline \text { above } \$ 70,000 & 17 \% \
\hline
\end{array}$$
The government has imposed a ________ tax system because its citizens will pay a ________ portion of their income as taxes as incomes increase.

Question

Suppose a government of LaLa Land imposes the following tax rates on its citizens.
$$\begin{array} { | c | c | } 
\hline \text { Income } & \text { Tax Rate } \
\hline \text { below } \$ 30,000 & 9 \% \
\hline \$ 30,001 - \$ 70,000 & 12 \% \
\hline \text { above } \$ 70,000 & 17 \% \
\hline
\end{array}$$
The government has imposed a ________ tax system because its citizens will pay a ________ portion of their income as taxes as incomes increase.

Quizplus · Accepted Answer

A progressive tax system means that as incomes increase, the tax rate also increases. In this case, as income increases from below $30,000 to $30,001-$70,000 and then to above $70,000, the tax rate increases from 9% to 12% and then to 17%, respectively. This means that citizens will pay a larger portion of their income as taxes as their income increases, which is the characteristic of a progressive tax system.

Suppose a Government of LaLa Land Imposes the Following Tax