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JAMB Economics 2001 Question 33

Question 33

Public Finance

A tax that increases at a higher percentage as income increases is called

  1. A.a proportional tax
  2. B.a regressive tax
  3. C.a progressive tax
  4. D.an income tax
Show the answer and explanation

Answer: C (a progressive tax)

Explanation

Under a progressive tax the rate rises as income rises, so higher earners pay a larger percentage.