A country has a Gini coefficient of 0.40. The lowest-income earners in this country do not pay income tax. The government raises the tax rate for the highest-income earners, and this leads to income being shared more equally. What can be concluded 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.