A government is considering a new tax on earnings.
Table 1 shows the tax that three workers would pay each year under the new tax.
| Worker | Annual income | Tax paid |
|---|---|---|
| Care assistant | £20,000 | £2,000 |
| Electrician | £40,000 | £3,200 |
| Architect | £80,000 | £4,800 |
Which statement correctly describes the new tax?
It is regressive, because it takes a smaller percentage of income as income rises
It is progressive, because it takes a larger percentage of income as income rises
It is progressive, because it takes a larger amount of tax as income rises
It is proportional, because it takes the same percentage of income at every level
75 exam-style questions on AQA GCSE Economics 2.1 Introduction to the national economy, covering 2.1.1a What an interest rate is, 2.1.1b Interest rates and consumer decisions, 2.1.1c Interest rates, producer decisions and calculations, 2.1.2a UK government revenue and spending, and 2.1.2b Direct, indirect and progressive taxation. Each one has a worked solution and a mark scheme showing where the marks go.