Question

Which statement about progressive taxes is true?

A.the rate increases as income increases.
B.the rate remains the same, even if income increases or decreases.
C.the rate decreases as income increases
D.the rate increases as income decreases

Answer 1

A. The rate increases as income increases.

Answer 2

The first alternative is correct (A).

The progressive tax is calculated in proportion to the income. This means that there are separate aliquots for each income group, where those groups that have the most money will pay a higher aliquot than those with a lower income.

The purpose of the progressive tax is to provide the state with a financial resource to be redistributed to society as a whole, for example in the form of schools, hospitals, roads. It is a redistribution policy aimed at reducing social inequality.