What is the primary difference between a progressive income tax system (progressief belastingstelsel) and a proportional tax system (vlaktaks)?
Answer and explanation
Correct answer: A. Under a progressive system
- Step 1: A progressive tax system uses tax brackets where higher income portions face higher marginal rates, reducing post-tax income inequality. Step 2. A proportional tax applies a constant uniform rate regardless of income level. Answer: Under a progressive system. Why not the others: A system where higher earners pay a lower rate is regressive; proportional taxes still tax high earners proportionally.
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