Question

With regressive tax system, as income:

• A. Increases, the tax rate remains the same
• B. Decreases, the tax rate decreases
• C. Increases, the tax rate increases
• D. Increases, the tax rate decreases

Hint:

Regressive taxes tend to be more burdensome for lower-income earners, as their tax rate decreases with higher income.

Answer 1

The Correct Option is D

In a regressive tax system, as income increases, the tax rate decreases. This means that people with higher incomes will pay a smaller percentage of their income in taxes compared to those with lower incomes.