Question: To what does tax progressivity refer?
Answer: Hello: )So Progressive tax refers to the tax structure in which tax rates are based on the level of income. A progressive tax is directly related to the taxpayer's ability to pay. Every year, we have to pay a fixed portion of our income to the central government in the form of income tax.
Explanation: In a tax progressive system, people who earned higher level of income would be subjected to higher tax percentage compared to people who earned lower level of income. This system is created to ensure that people with low level income could still meet their daily needs after paying their tax.
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