Briefly compare and contrast progressive, proportional, and regressive taxes. Give an example of a progressive tax and of a regressive tax
What will be an ideal response?
An ideal response will:
1, Explain that a progressive tax is one that takes a greater share of the income from the rich than the poor—for example, when a rich family pays 50 percent of its income in taxes, and a poor family pays 5 percent.
2, Provide an example of a progressive tax, such as income taxes. Explain why it is progressive.
3, Explain that a proportional tax takes the same share of income from everyone, rich and poor alike.
4, Explain that with a regressive tax, the burden falls relatively more heavily on low-income groups than on wealthy taxpayers, the opposite of a progressive tax, in which tax rates increase as income increases.
5, Provide an example of a regressive tax, such as a sales tax. Explain why it is regressive.
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