Use the graph above to answer the question
The curve labelled W shows the
- regressive tax
- proportional tax
- specific tax
-
progressive tax
The correct answer is: D
Explanation
A progressive tax is a tax system in which the tax rate increases as the amount of taxable income increases. This means that people with higher incomes pay a higher percentage of their income in taxes than people with lower incomes.
The curve labeled W shows that the tax rate increases as the amount of taxable income increases. This is the defining characteristic of a progressive tax system.