Question

In a degressive tax system, what happens to the tax rate after a certain higher income limit?

• A. It becomes proportional (fixed rate)
• B. It drops to zero
• C. It continues to increase indefinitely
• D. It varies each year

Answer 1

Answer:

A. It becomes proportional (fixed rate)

• After the tax base crosses a certain threshold, the degressive system applies a uniform tax rate, combining progressive and proportional features