Question : What is a progressive tax?
Option 1: A tax system where the rich pay a higher percentage of their income than the poor
Option 2: A tax system where the poor pay a higher percentage of their income than the rich
Option 3: A tax system where everyone pays the same percentage of their income
Option 4: A tax system where corporations pay taxes
Correct Answer: A tax system where the rich pay a higher percentage of their income than the poor
Solution : The correct answer is (a). A tax system where the rich pay a higher percentage of their income than the poor.
A progressive tax is a tax system in which the tax rate increases as the taxable income or wealth of individuals or entities increases. Under a progressive tax system, higher-income individuals or households are subject to higher tax rates, while lower-income individuals or households face lower tax rates.
The aim of a progressive tax system is to introduce greater tax equity by placing a heavier burden on those who have higher incomes and can afford to contribute more to government revenue. This approach is often based on the principle of ability to pay, as higher-income individuals are seen as having a greater ability to contribute to public services and social welfare.
In a progressive tax system, tax rates are typically structured into different income brackets or tax brackets. As individuals' incomes increase and they move into higher tax brackets, they pay a higher percentage of their income in taxes.
Question : What is a flat tax?
Option 1: A tax system where everyone pays the same percentage of their income
Option 2: A tax system where only the wealthy pay taxes
Option 3: A tax system where only the poor pay taxes
Question : What is a regressive tax?
Option 1: A tax system where the poor pay a higher percentage of their income than the rich
Option 2: A tax system where everyone pays
Option 3: A tax which tends to decrease as income increases
Option 4: A tax system where the rich pay a higher percentage of their income than the poor
Question : In a proportional tax system, if the tax rate is 10%, which of the following scenarios is correct?
Option 1: Individuals with higher incomes pay a higher dollar amount in taxes.
Option 2: Individuals with lower incomes pay a higher percentage of their income in taxes.
Option 3: Individuals with higher incomes pay the same percentage of their income in taxes as those with lower incomes.
Option 4: Individuals with lower incomes have to bear less burden of tax.
Question : What is the difference between a progressive tax and a regressive tax?
Option 1: A progressive tax is higher for higher income earners, while a regressive tax is higher for lower income earners
Option 2: A progressive tax is higher for lower income earners, while a regressive tax is higher for higher income earners
Option 3: A progressive tax is a direct tax, while a regressive tax is an indirect tax
Option 4: A progressive tax is a tax on goods and services, while a regressive tax is a tax on income
Option 1: A progressive tax is a tax that increases as income increases, while a regressive tax is a tax that decreases as income increases
Option 2: A progressive tax is a tax that decreases as income increases, while a regressive tax is a tax that increases as income increases
Option 3: A progressive tax is a tax that is based on the value of a good or service, while a regressive tax is a tax that is based on the quantity of a good or service
Option 4: A progressive tax is a tax that is based on the quantity of a good or service, while a regressive tax is a tax that is based on the value of a good or service
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