Jurisdiction M imposes an individual income tax based on the following schedule. $$\begin{array} { | c | c | }
\hline \text { Rate } & \text { Income bracket } \
\hline 5 \% & \$ - 0 - \text { to } \$ 50,000 \
\hline + 8 \% & \$ 50,001 \text { to } \$ 200,000 \
\hline + 12 \% & \$ 200,001 \text { ard above } \
\hline
\end{array}$$ Which type of rate structure does this tax use?

Question

Jurisdiction M imposes an individual income tax based on the following schedule. $$\begin{array} { | c | c | } 
\hline \text { Rate } & \text { Income bracket } \
\hline 5 \% & \$ - 0 - \text { to } \$ 50,000 \
\hline + 8 \% & \$ 50,001 \text { to } \$ 200,000 \
\hline + 12 \% & \$ 200,001 \text { ard above } \
\hline
\end{array}$$ Which type of rate structure does this tax use?

Quizplus · Accepted Answer

The tax rate increases as income increases, which is the characteristic of a progressive tax. This tax has multiple brackets, but that does not affect the fact that it is a progressive tax.

Jurisdiction M Imposes an Individual Income Tax Based on the Following