A Tax Is Said to Be Progressive If _____

question 31

Multiple Choice

A tax is said to be progressive if _____

• A) the absolute size of the tax (in dollars) increases as income increases.
• B) the wealthy pay a smaller percentage of their income in taxes than the poor.
• C) the average tax rate falls as income rises.
• D) the proportion of income paid as taxes increases as income increases.
• E) the proceeds are used to pay for political programs.

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Definitions:

Profitability

The degree to which a business or activity yields profit or financial gain.