Scenario: There are 4 households in a locality. The annual income of the first household is $20,000, the annual income of the second household is $47,000, the annual income of the third household is $50,000, and the annual income of the fourth household is $71,000.
-Refer to the scenario above.Which family pays the lowest percentage of its income in tax if the government follows a progressive tax system?

Question

Quizplus · Accepted Answer

In a progressive tax system, the tax rate increases as income increases. Therefore, the household with the lowest income pays the lowest percentage of its income in taxes. In this scenario, the first household has the lowest income and would pay the lowest percentage of its income in taxes.

Scenario: There Are 4 Households in a Locality