Question

A __________________________ policy will cause a greater share of income to be collected from those with high incomes than from those with lower incomes.
(A) proportional tax (B) regressive tax (C) progressive tax (D) excise tax

Answer 1

Answer: Progressive tax policy

Explanation: In a progressive tax policy the rate of tax increases with the amount of taxable income, thus, making it possible to tax the people with higher income high tax and the lower section of the society a low level of tax.

The concept of progressive tax policy is based on the concept of ability to pay and not necessity to pay.

Thus, from the above we can conclude that right option is A.