One goal of taxation is fairness or equity. A measure of tax fairness is the taxpayer's ability to pay. Determine the fairness of taxes in a regressive, progressive, and proportional tax system.
Use the charts below to answer the questions that follow. To calculate the amount of tax paid for each income level, multiply the tax rate by the income level. Click on the letter of the correct answer. To assess your answers, click the Check My Answers button at the bottom of the page.
| How do regressive taxes affect income? |
How do progressive taxes affect income? |
How do proportional taxes affect income? |
| Income |
Tax Rate |
Income |
Tax Rate |
Income |
Tax Rate |
| $10,000 |
20% |
$10,000 |
10% |
$10,000 |
20% |
| $50,000 |
4% |
$50,000 |
20% |
$50,000 |
20% |
| $100,000 |
2% |
$100,000 |
30% |
$100,000 |
20% |
1) In a regressive tax system, what is the tax amount for a person who earns $10,000 a year?
2) After taxes, how much will a person who made $50,000 have left in this regressive tax system?
3) How much will the highest taxed income level pay in taxes in a progressive tax system?
4) What amount of taxes will those with an income of $10,000 pay in a progressive tax system?
5) In a proportional tax system, how much will a person earning $10,000 a year have after taxes?
6) What will the tax amount be for a person who earns $100,000 a year?
