If income rises and the percentage of income paid as tax falls, it is called
A regressive tax takes a smaller percentage of income as income rises, so it bears more heavily on the poor. A progressive tax takes a rising percentage and a proportional…
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If income rises and the percentage of income paid as tax falls, it is called
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Correct answer D
A regressive tax takes a smaller percentage of income as income rises, so it bears more heavily on the poor. A progressive tax takes a rising percentage and a proportional tax a constant one. A neutral tax is one that does not distort economic choices; the term does not describe how the tax rate changes with income.
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UGC NET Economics