If most people in country A fall in the lowest tax bracket and most people in country B fall in the highest tax bracket and both countries have progressive tax systems,we should expect tax revenues to be higher in country A.

Question

Quizplus · Accepted Answer

Even though the tax rate is higher in country B, the total tax revenue may not necessarily be higher because the number of people paying taxes is lower. In country A, although the tax rate is lower, there are more people in the tax base, which can lead to higher tax revenues. The progressiveness of the tax system does not automatically determine the total tax revenue.

If Most People in Country a Fall in the Lowest