What tax system requires individuals to pay a higher percentage of taxes as their income increases?

The correct answer is based on the principle that a progressive taxation system is designed so that individuals with higher incomes pay a larger percentage of their income in taxes compared to those with lower incomes. This system is rooted in the belief that the ability to pay should dictate the amount of tax owed; thus, as someone's income rises, the tax rate applied to that income also increases.

This approach aims to address income inequality by redistributing wealth more equitably throughout society. By imposing higher rates on higher income brackets, progressive taxation seeks to provide necessary funding for public services and social programs that benefit all members of the community, especially those in lower income brackets.

In contrast, other systems such as regressive taxation impose a greater burden on lower-income individuals, where the tax rate decreases as income increases. Flat tax systems apply the same tax rate to all income levels, while proportional taxation, often synonymous with flat tax, means that the tax rate remains constant regardless of income level. Therefore, progressive taxation is the only system mentioned that specifically aligns with the principle of increasing tax rates alongside rising income.