Multiple choice

Which of the following taxes help(s) in reducing disparities of income?

  1. Proportionate tax

  2. Progressive tax

  3. Regressive tax

  4. All of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Progressive taxation is designed to reduce income disparities by imposing higher tax rates on higher income brackets. This structure places a greater tax burden on those with greater ability to pay, effectively reducing income inequality. Proportionate taxes take the same percentage from all incomes, while regressive taxes take a larger percentage from lower incomes (increasing disparity).

Keep practicing — related questions