In the context of a progressive tax system, which group bears a greater tax burden?

• A. Individuals with lower incomes
• B. Individuals with higher incomes
• C. Individuals with no income
• D. All individuals pay the same proportion of their income

Answer: (B)

Verified step by step guidance

1. Understand the definition of a progressive tax system: it is a tax system where the tax rate increases as the taxable income increases.
2. Recognize that in a progressive tax system, individuals with higher incomes pay a larger percentage of their income in taxes compared to those with lower incomes.
3. Analyze the tax burden, which refers to the share of income paid in taxes; since tax rates rise with income, higher-income individuals bear a greater tax burden.
4. Compare this with other tax systems, such as proportional (flat) tax where everyone pays the same percentage, or regressive tax where lower-income individuals pay a higher percentage.
5. Conclude that in a progressive tax system, the group with higher incomes bears a greater tax burden because their marginal tax rates are higher.