Practice Quiz

CLEP US Government

Category - Policy Processes

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What is a progressive tax?
  1. A tax where every taxpayer pays the same percentage of her income.
  2. A tax where people who make less money pay a higher percentage of their income.
  3. A tax where people who make more money pay a higher percentage of their income.
  4. A tax that liberals like.
  5. A tax where the rate of taxation increases over time.
Explanation
Answer: C - A progressive tax is a tax where people who make more money pay a higher percentage of their income. In a progressive tax, someone who makes $500,000 would pay a higher percentage of their income than someone who makes $50,000. The more you make, the higher the percentage you pay. In the US, the federal income tax is a progressive tax. People in 2011 who made less than $8700 had a tax rate of 10% whereas people who made more than $388,350 had a tax rate of 35%.
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