Question

Highlight the difference between progressive and regressive tax.

Answer 1

Answer:

see below

Explanation:

A progressive tax system imposes taxes depending on income earned. The higher the income, the higher the tax rate. It means individuals and entities with a higher income with pay more taxes. A progressive tax system promotes equity by imposing higher taxes on the wealthy and lower taxes on the poor. The US income tax system is an example of a progressive tax.

A regressive tax system does not discriminate on income. It taxes all eligible taxpayers equally regardless of their income level. A regressive tax applies the same tax rate for everyone. Sale tax imposed on goods sold is an example of regressive tax. The regressive tax system takes a higher proposition of income from the low-income earners.