ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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**Understanding Progressive Taxation**

A progressive tax is a tax system where the tax rate increases as the taxable amount increases. In other words, individuals or entities with higher incomes tend to pay a larger percentage of their income in taxes. This taxation method is based on the ability-to-pay principle, which asserts that those who have more resources (income or wealth) should contribute more to public coffers.

**Question**:
With a progressive tax, those with _____ income tend to pay a _____.

Options:
- More; lower share of their income in taxes
- More; higher share of their income in taxes
- More; flat tax rate
- Less; higher share of their income in taxes
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Transcribed Image Text:**Understanding Progressive Taxation** A progressive tax is a tax system where the tax rate increases as the taxable amount increases. In other words, individuals or entities with higher incomes tend to pay a larger percentage of their income in taxes. This taxation method is based on the ability-to-pay principle, which asserts that those who have more resources (income or wealth) should contribute more to public coffers. **Question**: With a progressive tax, those with _____ income tend to pay a _____. Options: - More; lower share of their income in taxes - More; higher share of their income in taxes - More; flat tax rate - Less; higher share of their income in taxes
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