Question

Explain the difference between a progressive, regressive, and proportional tax and provide an example of each.

Answer 1

In Progressive tax system ,income tax is directly related with income which means if income increases the tax will also increase and vice versa .

Opposite to it is regressive tax system in which as the income increases the tax charge decreases

In proportional tax system the tax charge is constant whether the income increase or decrease or remain constant.

The best example of progressive tax system will be countries like India , US .

Scandinavian countries like Denmark ,Sweden ,Norway generally go for regressive system.

Russia adopted for proportional tax system