- The taxation policy is a progressive.
- A progressive tax system takes a larger percentage from the income of high-income earners than it does from low-income individuals.
- Taxation Policy (progressive, proportional, flat, or regressive tax system?):
- Australia has a progressive tax system. A progressive tax system is a tax that takes a larger percentage from the income of high-income earners than it does from low-income individuals. This relates to the circular flow of goods and services, because households and factories have to pay taxes to the government. This also relates to supply because when taxes go up, supply goes down and when supply goes down, taxes go up.