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In a progressive tax system, which one of the following happens if the government cuts everyone's...

In a progressive tax system, which one of the following happens if the government cuts everyone's income taxes by an equal percentage?

As a percentage of their income, the lower income groups receive a larger cut in their taxes compared to the higher income groups.
In absolute dollar amounts, the higher income groups receive a larger cut in their taxes as compared to the lower income groups.
As a percentage of their income, the middle class income groups receive a larger cut in their taxes compared to the higher income groups as compared to both the lower and higher income groups.
In absolute dollar amounts, both the lower and high income groups receive the same cut in their taxes.
In absolute dollar amounts, the lower income groups receive a larger cut in their taxes as compared to the higher income groups.
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Answer #1

"In absolute dollar amounts, the higher income groups receive a larger cut in their taxes as compared to the lower income groups".

As to the extent that wealthy people will loose less compared to poor people. It is clear that rich people use more government services than poorer people, for eg. through businesses and contracts. So basically they are relying on government to enforce contracts to a degree that poorer people don't.

It is clear that rich people lose less happiness per dollar taxed than poorer people. Taking hundred dollars from a rich person should reduce overall happiness far less from a poorer person.

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