When a government taxes an individual's first $10,000 of income at 10 percent, the next $30,000 at 15 percent, and all further income at 40 percent, the government's income tax is
Best described as a ________ tax.

Question

Quizplus · Accepted Answer

This is because the tax rate increases as income increases. The first $10,000 is taxed at 10%, which is a lower rate than the next $30,000, which is taxed at 15%. The highest tax rate of 40% is applied to all income above the first $40,000. This system of increasing tax rates with increasing income is characteristic of a progressive tax.

When a Government Taxes an Individual's First $10,000 of Income