Asked by Gabriela Alcaraz on May 08, 2024
Verified
Sallie earned $25,000 and paid $2,000 of income tax;Theodore earned $35,000 and paid $2,900 of income tax.The tax rate structure they are subject to is:
A) Progressive.
B) Proportional.
C) Regressive.
D) Recessive.
Progressive
A system or policy where the level of contribution or effort increases with some measure of capacity, such as a progressive tax system where higher income earns pay a higher rate.
Proportional
Relating to or denoting a relationship where elements vary together at a constant rate and a change in one element results in a corresponding change in another.
Regressive
A term describing a tax system where the tax rate decreases as the taxable amount increases, placing a greater relative burden on lower income earners.
- Recognize the differences between progressive, proportional, and regressive tax rate configurations.
Verified Answer
GA
Gabrielle AlvaradoMay 09, 2024
Final Answer :
A
Explanation :
The tax rate structure is progressive because the more someone earns, the higher percentage of their income they are required to pay in taxes. In this case, Sallie and Theodore both paid a higher percentage of their income in taxes than someone who earned less.
Learning Objectives
- Recognize the differences between progressive, proportional, and regressive tax rate configurations.