Question

Using income as the tax base, which of the following best illustrates a regressive tax? Multiple Choice 1. the corporate income tax 2. a 7 percent general sales tax 3. the federal inheritance tax 4. the personal income tax

Answer 1

The correct answer is A

Step-by-step explanation:

Regressive tax is the tax which is applied uniformly by taking or considering the larger percentage of the income from the earners of low income than the earners of high income.

It is opposite of the progressive tax, which considers the larger percentage of the earners of high income.

So, when using the income as a tax base, the regressive tax is 7% of the general sales tax.