What is a progressive tax?

A progressive tax is characterized by its structure, where the tax rate increases as the taxable income increases. This means that individuals with higher incomes pay a larger percentage of their income in taxes compared to those with lower incomes. The rationale behind a progressive tax system is to reduce income inequality by ensuring that those with greater financial means contribute more to funding public services and social programs. The progressive nature serves to alleviate the tax burden on lower-income earners, providing a form of economic equity. In contrast, other types of taxes, such as flat taxes, apply the same rate to all income levels, while regressive taxes impose a heavier burden on those with lower incomes. Hence, the definition of a progressive tax aligns perfectly with the system where tax rates escalate with income, making the designated answer the most accurate representation of a progressive tax.