A. rate of tax is constant at all income levels B. rate of tax decrease as income increases C. rate of tax increases as income increases D. tax is direct rather than indirect
Correct Answer: B
Explanation
A regressive tax is a tax applied uniformly, taking a larger percentage of income from low-income earners than from high-income earners. Regressive taxes place more burden on low-income earners. Since they are flat taxes, they take a higher percentage of income on the poor than on high-income earners. The taxable rate reduces as income increases, and it increases as income decreases.
