Which of the following would be a progressive tax?

Question

Everyone pays a 5 percent sales tax.

People earning $35,000 pay 10 percent tax, while people earning $100,000 pay 30 percent tax.

People pay 10 percent tax on property, whether it is worth $50,000, $500,000, or $50 million.

All people pay a 15 percent income tax.

Answer 1

A progressive tax is one where the tax rate increases as the taxable amount (such as income) increases, meaning that those with higher incomes pay a higher percentage of their income in taxes.

Based on the options provided, the correct answer is:

People earning $35,000 pay 10 percent tax, while people earning $100,000 pay 30 percent tax.

In this scenario, higher-income earners (those making $100,000) are taxed at a higher rate (30%) compared to lower-income earners (those making $35,000, who pay 10%). This structure exemplifies a progressive tax system.