Asked by Megan Shook on May 02, 2024

verifed

Verified

Jake earned $15,000 and paid $1,500 of income tax,while Jill earned $40,000 and paid $6,000 of income tax.The tax rate structure they are subject to is:

A) Progressive.
B) Proportional.
C) Regressive.
D) Recessive.

Tax Rate Structure

Describes how tax rates progress from low to high depending on income levels, assets, or transactions, varying from progressive, regressive, or proportional.

Progressive

A taxation system in which the tax rate increases as the taxable amount increases, often applied to income tax.

Regressive

In taxation, regressive describes a tax that takes a smaller percentage of income as the income increases, often placing more burden on lower-income individuals.

  • Differentiate among various tax rate frameworks, including progressive, proportional, and regressive systems.
verifed

Verified Answer

AP
Allison PerezMay 03, 2024
Final Answer :
A
Explanation :
A progressive tax structure means that as an individual's income increases, the percentage of tax they pay also increases. In the given scenario, Jake's income is lower than Jill's, and hence he pays a lower amount of tax. This indicates a progressive tax structure where the tax rate increases with the increase in income. Therefore, option A) Progressive is the correct choice.