Final answer:
A tax where gifts are taxed at 10% for amounts up to $100,000 and 20% for amounts over $100,000 is a progressive tax, because the tax rate increases with the amount given.
Step-by-step explanation:
Progressive taxes increase as the taxable amount increases, which means the more money one earns, the higher the tax rate they pay. An example of a progressive tax would be a situation where gifts are taxed at 10% for amounts up to $100,000 and at 20% for anything over that amount. This means that individuals who are gifting larger amounts pay a higher percentage of tax on the portion of the gift that exceeds $100,000.
Regressive taxes, on the other hand, place a greater burden on those with lower incomes. Taxes such as excise taxes and sales taxes are considered regressive because, although the tax rate does not change, lower-income individuals end up paying a higher proportion of their income towards these taxes compared to higher-income individuals.