Multiple choice

Which of the following types of tax has an adverse effect on the willingness to earn more and work?

  1. Proportional Tax

  2. Progressive Tax

  3. Regressive Tax

  4. Digressive Tax
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

It is progressive tax. The progressive tax is the tax in which the rate of tax increases with the increase in income. Hence, if the person's income increases, he or she knows that a large part of income will have to be paid as tax to government. Thus, it has an adverse effect on the willingness to earn and there is reluctance to work more.

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