The correct answer is: B) Progressive Tax.
A progressive tax is a tax that takes a larger percentage of income from high-income earners than from low-income earners. This is in contrast to a regressive tax, which takes a larger percentage of income from low-income earners than from high-income earners.
A flat tax is a tax that charges the same percentage of income from all taxpayers, regardless of their income level. An indirect tax is a tax that is levied on goods and services, rather than on individuals or businesses.
Here is a table that summarizes the key differences between progressive, regressive, and flat taxes:
| Type of Tax | How it is calculated | Example |
|—|—|—|
| Progressive Tax | Takes a larger percentage of income from high-income earners than from low-income earners | Income tax in the United States |
| Regressive Tax | Takes a larger percentage of income from low-income earners than from high-income earners | Sales tax |
| Flat Tax | Charges the same percentage of income from all taxpayers, regardless of their income level | Flat tax proposed by Milton Friedman |