Family A earns $20,000 a year, Family B earns $40,000, and Family C earns $100,000. Which of the following tax systems can most accurately be described as progressive?
a) Family A pays 5 percent of earnings in tax, Family B pays 8 percent, and Family C pays 12 percent.
b) All three families pay 10 percent of their earnings in taxes.
c) Family A pays 10 percent of earnings in taxes, Family B pays 7 percent, and Family C pays 4 percent.
d) Family A pays 10 percent of earnings in taxes, Family B pays 8 percent, and Family C pays 12 percent.
e) Allowing each family to decide the appropriate tax rate for their situation.
Answer: A
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