A country has a Gini coefficient of 0.40. In this country, the lowest-income earners do not pay any income tax. The government raises the tax rate for the highest-income earners, leading to a more equal spread of income. What conclusion could be drawn from this?
- AThe Gini coefficient falls and the income tax system becomes more progressive.
- BThe Gini coefficient falls and the income tax system becomes more regressive.
- CThe Gini coefficient rises and the income tax system becomes more progressive.
- DThe Gini coefficient rises and the income tax system becomes more regressive.