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      Question

      Which of the following statements best describes the

      principle of progressive taxation?
      A Everyone pays the same percentage of income as tax. Correct Answer Incorrect Answer
      B Higher income earners pay a higher percentage of their income as tax. Correct Answer Incorrect Answer
      C Tax is levied uniformly on all goods and services. Correct Answer Incorrect Answer
      D Tax is levied only on consumption and not on income. Correct Answer Incorrect Answer
      E A flat tax rate is applied to all individuals regardless of income. Correct Answer Incorrect Answer

      Solution

      Progressive taxation means the tax rate increases as the taxpayer's income increases, ensuring a more equitable distribution of the tax burden. It is based on the principle of ability to pay and is intended to reduce income inequality.

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