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A sales tax is an example of a tax that uses a ____________ tax rate structure when compared to its tax base.

Options:
A) Progressive
B) Regressive
C) Proportional
D) Graduated

User Antichris
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1 Answer

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Final answer:

A sales tax is a regressive type of tax, as it places a higher relative burden on lower-income individuals than on those with higher incomes.

Step-by-step explanation:

A sales tax is an example of a tax that uses a regressive tax rate structure when compared to its tax base. Under a regressive tax system, individuals with higher incomes pay a smaller percentage of their income in taxes, meaning the tax burden falls more heavily on those with lower incomes. For instance, a sales tax affects lower-income individuals more because they spend a larger portion of their earnings on taxed goods, while the wealthier can save or invest a greater share of their income, which is not subject to this tax.

User Orium
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