Consider a System in Which a Person Earning $10,000 Pays

question 4

Multiple Choice

Consider a system in which a person earning $10,000 pays $1,000 in taxes, a person earning $25,000 pays $2,000, and someone earning $60,000 pays $4,000. This is an example of _____

• A) progressive taxation.
• B) proportional taxation.
• C) regressive taxation.
• D) a property tax.
• E) a tax based on the benefits-received principle.

---

Definitions:

Draft

A written order by which the party creating it orders another party to pay money to a third party. Also called bill of exchange.

Instrument

A formal legal document that serves as evidence of a fact, act, or obligation, such as a deed, will, or contract.

Insane

A term describing severe mental illness or insanity, legally signifying inability to understand or control one's actions.

Checks

A written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer.