Question

Governments generally impose higher taxes on the rich, moderate taxes on the not-so-rich and exempt the poor from paying taxes. This principle of taxation is called ______.

• A. progressive taxation policy
• B. heavy taxation policy
• C. direct taxation policy
• D. protective taxation policy

Answer 1

Answer: (A)

progressive taxation policy

A progressive tax is a tax in which the tax rate increase as the taxable amount increases. The term "progressive" refers to the way the tax rate progresses from low to high, with the result that a taxpayer's average tax rate is less than the person's marginal tax rate