Asked by Alexis Karageanes on Jun 30, 2024
Verified
A person whose income has increased from $10,000 to $20,000 finds that her federal marginal tax rate has increased from 18 percent to 22 percent. This is an example of a
A) regressive tax.
B) progressive tax.
C) proportional tax.
D) fair tax.
Marginal Tax Rate
The rate at which the last dollar of income is taxed, indicating the percentage of an additional dollar of income that is paid in tax.
Progressive Tax
A tax system where the rate of taxation increases as the taxable income or amount increases, placing a higher burden on wealthier individuals.
Income
The financial gain (earned or unearned) accruing over a given period of time.
- Differentiate between progressive, regressive, and proportional taxes.
Verified Answer
ZK
Zybrea KnightJul 03, 2024
Final Answer :
B
Explanation :
This is an example of a progressive tax because as the person's income increases, the marginal tax rate (the rate on the next dollar of income) also increases. This is characteristic of a progressive tax system, where higher income earners pay a higher percentage of their income in taxes compared to lower income earners.
Learning Objectives
- Differentiate between progressive, regressive, and proportional taxes.