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The rate of tax increase as the amount of the tax base increases is called
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- Proportional tax
- Progressive tax
- Regressive tax
- Degressive tax
- Proportional tax
Correct Option: B
A progressive tax is a tax in which the tax rate increases as the taxable amount increases. The term “progressive” refers to the way the tax rate progresses from low to high, with the result that a taxpayer’s average tax rate is less than the person’s marginal tax rate.
