Question

What is progressive tax and what is it based on?

Answer 1

A progressive tax takes a larger percentage of income from high income groups than from low income groups and is based on the concept of ability to pay.

Answer 2

Step-by-step explanation:

When the percentage of tax on the taxable income increases with the increase in the income of a person, it is called as the Progressive Tax. Its name suggests that as the income progresses, the tax also progresses. More the income, more the tax and vice versa. There are three main types of taxes, one is Proportional Tax, other is Progressive and the last one is Regressive tax. Out of these three, this progressive tax is the one which increases with the increase in the taxable income of the taxpayer.