Question

If government tax policy requires Bill to pay $20,000 in taxes on annual income of $200,000 and Paul to pay $10,000 in tax on annual income of $100,000, then the tax policy is: regressive. progressive. proportional. optional.

Answer 1

proportional

Step-by-step explanation:

In a proportional tax system, the same rate is applied to all tax payers.

In this question, both bill and Paul pay 10% of their income as tax.

In a progressive tax, tax rate increases as taxable income increases.

In a regressive tax, tax rate decreases with increase in taxable income.

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