Progressive taxation is often promoted as a tool for reducing income inequality. Which of the following describes a key characteristic of progressive taxation and its intended impact on income distribution?
1
In progressive taxation, the tax rate decreases as income rises, leading to increased disposable income for higher earners
2
Progressive taxation applies a higher tax rate on higher income levels, reducing disposable income inequality by taxing wealthier individuals more heavily
3
Progressive taxation applies a flat rate on all incomes, ensuring equal taxation across all income levels
4
Progressive taxation applies only to corporate taxes and is unrelated to individual income taxation
5
Question Not Attempted