A tax is regressive if the tax takes a A. Larger number of dollars as income falls.B. Smaller fraction of dollars as income falls.C. Larger number of dollars as income rises.D. Smaller fraction of dollars as income rises.
D. Smaller fraction of dollars as income rises.
D. Smaller fraction of dollars as income rises.
A regressive tax takes a smaller fraction or percentage of income as income rises. In other words, people with lower incomes pay a higher percentage of their income in taxes compared to those with higher incomes. This type of tax places a greater burden on low-income individuals in comparison to high-income earners. Examples of regressive taxes include sales taxes and payroll taxes.
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