How is the federal income tax a progressive tax?

Question

A person with a higher income pays more money in taxes, although the percentage he or she pays as tax is less.

Children pay no taxes, regardless of whether they earn a large income.

Two married people who file their taxes together will pay more taxes than a single person will.

The higher the income a person has, the higher the percentage that person pays in tax.

Answer 1

The federal income tax system is considered a progressive tax system because the tax rate increases as a person's income increases. This means that individuals with higher incomes pay a larger percentage of their income in taxes compared to those with lower incomes.

From the options you've provided, the statement that best describes the progressive nature of the federal income tax is:

"The higher the income a person has, the higher the percentage that person pays in tax."

This underscores the principle of a progressive tax: as income rises, both the total tax burden and the effective tax rate (the percentage of income paid in taxes) also increase, which is designed to ensure that those with greater financial capabilities contribute a larger share to federal tax revenues.