Three common types of tax rate

There are three common types of tax rate: progressive rate, regressive rate, and proportional rate.

(1) Progressive rate

Under progressive rate, the tax rate increases when the income of an individual increases.

(2) Regressive rate

Under regressive rate, the tax rate decrease when the income of an individual increases.

(3) Proportional rate

Under proportional rate, the tax rate is a flat tax rate.