Question

What characterizes a progressive tax system?

• A. Tax rate remains constant regardless of income
• B. Tax rate decreases as the tax base increases
• C. Tax rate increases as the tax base increases
• D. Tax is only on goods and services

Answer 1

Answer:

C. Tax rate increases as the tax base increases

• In a progressive tax system, the tax rate rises with an increase in the taxable amount or income, meaning higher-income individuals pay a higher rate.

• Income tax is an example of a progressive tax.