Which one of the following represents a progressive tax structure?

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Q: 75 (CDS-II/2015)

Which one of the following represents a progressive tax structure?

question_subject: 

Economics

question_exam: 

CDS-II

stats: 

0,102,19,9,102,5,5

keywords: 

{'progressive tax structure': [0, 0, 0, 1], 'tax rate': [0, 0, 0, 2], 'tax rate increases': [0, 0, 0, 1], 'tax': [0, 0, 0, 1], 'income increases': [0, 0, 0, 1], 'incomes': [0, 0, 0, 3]}

The correct answer is option 2, which states that the tax rate increases as income increases. A progressive tax structure is a tax system where the tax rate increases as the income of individuals or households increases. This means that individuals or households with higher incomes will pay a higher percentage of their income in taxes compared to those with lower incomes.

Option 1, which states that the tax rate is the same across all incomes, does not represent a progressive tax structure. This is known as a flat tax, where everyone pays the same percentage of their income in taxes, regardless of their income level.

Option 3, which states that the tax rate decreases as income increases, does not represent a progressive tax structure either. This is known as a regressive tax, where individuals with lower incomes pay a higher percentage of their income in taxes compared to those with higher incomes.

Option 4, which states that each household pays an equal amount of tax, also does not represent a progressive tax structure. This is known as a proportional tax, where everyone pays the same fixed amount of tax, regardless of their income level.

Therefore, the correct answer is option 2, where the tax rate increases as income increases, representing a progressive tax structure.

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