Question 41
Public FinanceMr. X and Mrs. Y pay $500.00 and $1,400.00 as taxes on their earnings of $5,000.00 and $7,000.00 respectively. The system of taxation employed is
- A.specific tax.
- B.proportional tax.
- C.regressive tax.
- D.progressive tax.
Show the answer and explanation
Answer: D (progressive tax.)
Explanation
Mr X pays 10% and Mrs Y 20%: the rate rises with income.