Final answer:
A 'graduated tax' applies higher tax rates to higher income levels and is also known as a progressive tax. Options A (flat rate), C (regressive nature), and D (not considering income variations) are incorrect descriptions of a graduated tax.
Step-by-step explanation:
Regarding a 'graduated tax', the correct statement is that it applies higher tax rates to higher income levels. This system is known as a progressive tax, where the marginal tax rate increases as one's income increases. In this system, those who earn more pay a higher percentage of their income in taxes, which is the opposite of a regressive tax, where people with higher incomes pay a smaller share of their income in taxes. A proportional tax, also known as a flat tax, is where everyone pays the same percentage of their income, regardless of how much they earn. Therefore, statements A and C, which describe a flat rate and regressive nature, are incorrect for a graduated tax. Statement D is also incorrect as a graduated tax does consider income variations.
Learn more about Graduated Tax