Answer:
C. progressive taxation
Step-by-step explanation:
Taxation can be defined as the involuntary or compulsory fees levied on individuals or business entities by the government to generate revenues used for funding public institutions and activities.
There are three (3) types of taxation used by the government, these are;
1. Regressive taxation: it involves charging individuals with low incomes a higher percentage of their total income and vice-versa.
- For instance, John pays 15% on $60,000 and Joyce pays 20% on $36,000.
2. Proportional taxation: it involves charging both lower and higher income earners equally in proportion to their income.
- For instance, John pays 20% on $50,000 and Joyce pays 20% on $36,000.
3. Progressive taxation: it involves charging individuals having higher incomes a higher percentage of their total income.
- For instance, John pays 30% on $70,000 and Joyce pays 10% on $45.000.
Hence, if employees who make more money pay a higher percentage of their income to the government, this is known as progressive taxation.
