Which of the following best describes progressive taxation?

Progressive taxation is defined as a system in which the tax rate increases as an individual's income increases. This means that higher-income earners pay a larger percentage of their income in taxes compared to lower-income earners. The rationale behind such a system is to promote equity by redistributing wealth and reducing income inequality.

By having higher tax rates for those who can afford to contribute more, progressive taxation effectively lessens the financial burden on lower-income individuals while ensuring that those with greater financial resources contribute a fairer share towards public services and benefits. This structure is designed to support social welfare programs and public services that often provide a safety net for the less advantaged.

In contrast, other tax systems, such as a flat tax where everyone pays the same rate, or systems reliant solely on sales taxes, do not incorporate this tiered approach to taxation. Sales taxes typically affect lower-income individuals more heavily since they take a larger proportion of their income, failing to account for the ability to pay. Additionally, capital gains taxes apply only to income generated from investments and do not represent a comprehensive tax strategy for all income types. Thus, the essence of progressive taxation is captured by the idea of increasing rates aligned with increasing income levels.