What defines a tax band?

A tax band is defined as a varying rate based on income brackets. This means that different portions of a taxpayer's income are taxed at different rates, which are determined by the thresholds of those income brackets. For example, individuals might pay a lower tax rate on their income within the first band and then a higher rate on any income that exceeds that threshold. This progressive taxation system aims to ensure that those with higher incomes contribute a larger percentage of their income towards taxes, reflecting an equitable approach to tax payment.

Other options do not accurately describe a tax band: a flat rate applies the same tax percentage to all taxpayers regardless of their income level, which contradicts the concept of varying tax bands; a fixed percentage for income below a threshold does not account for higher earnings; and a collection of tax credits pertains to deductions and benefits rather than the taxation rate structure related to income.