Tax progression via effective rates

Steps:

• Calculate effective tax rate: (tax ÷ income) × 100 for each level.
• $100 income: 20 ÷ 100 = 20%.
• $150 income: 30 ÷ 150 = 20%.
• $200 income: 36 ÷ 200 = 18%.
• $250 income: 40 ÷ 250 = 16%.

Why C is correct:

• Proportional tax holds constant rate (20% for first two incomes); regressive tax decreases rate with rising income (18% then 16%), matching the pattern per tax incidence definitions.

Why the others are wrong:

• A: Rates do not increase with income, so not progressive.
• B: Rates decrease after proportionality, not increase to progressive.
• D: Initial segment is proportional, not regressive from start.

Final answer: C