The analysis of a progressive tax is very similar to that of a proportional tax.
A) True
B) False
C) Uncertain

Question

Quizplus · Accepted Answer

The analysis of a progressive tax is similar to that of a proportional tax because both types of taxes are calculated based on a percentage of the taxpayer's income. However, the main difference is that a progressive tax increases the percentage taken as income increases, while a proportional tax takes the same percentage regardless of income level. Therefore, the analysis may differ in terms of the distributional effects on different income groups, but the basic analysis of tax revenue and economic efficiency is similar.

The Analysis of a Progressive Tax Is Very Similar to That