Question

A tax that takes a higher proportion from a low income person then a rich person is known as a/an ____ tax.

A. Estate

B. Progressive

C. Proportional

D regressive

Answer 1

Answer: D - regressive

Step-by-step explanation:

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Answer 2

D. Regressive

Step-by-step explanation:

• When the taxes are set taking into consideration the income of persons, they can be classify as proportional, progressive or regressive.

• When a tax schedule is progressive, rich people pay a higher proportion of their income in taxes, compared to people who have lower income. An example of this situation is a tax scheme where people who earn more than 500 thousand dollars a year pay a tax rate of 30%, while people who earn less than 500 thousand dollars a year pay a tax rate of 15% . This type of tax scheme reduce inequalities in a society by relatively increasing poor's income in terms of rich's income.
• When a taxe schedule is regressive, the situation is the opposite: rich people pay a lower proportion of their income in taxes, compared to people with lower income. Floowing the example above, if the rich people pay 10% of their income in taxes, and people with lower income pay 40% of their income in taxes, the tax system is regressive: it increases inequality into society by relatively increasing income of richier persons in terms of income of poorer people.
• If tax schedule is proportional, the tax system scheme affects equally both richier people, and poorer people (this happens, for example, when everyone pays 10% of their income in taxes, no matter the income).