Question

With a progressive tax, the tax rate __________ as income increases.

Lower-income individuals bear a greater burden with this type of tax.
Options:
a. increases
b. decreases
c. remains constant
d. fluctuates

Answer 1

The tax rate in a progressive tax system increases as income increases. Higher-income individuals pay a higher percentage of their income in taxes, contrary to the idea that lower-income individuals bear a greater burden.

Step-by-step explanation:

The tax rate in a progressive tax system increases as income increases. Higher-income individuals pay a higher percentage of their income in taxes, contrary to the idea that lower-income individuals bear a greater burden.In a progressive tax system, the tax rate increases as income increases. This means that individuals who earn more money pay a higher percentage of their income in taxes, using what is called a marginal tax rate.

For instance, someone earning between $50,000 and $80,000 may be taxed at a rate of 20%, while someone earning between $300,000 and $1,000,000 could be taxed at a rate of 35%. Progressive taxes are designed to be fairer by placing a larger burden on those who have the ability to pay more. It's important to note that the options presented in the question contain an inaccuracy regarding the burden on lower-income individuals. In fact, under a progressive taxation system, it is the higher-income individuals who bear a greater relative tax burden, not the lower-income individuals.