Suppose Governor Meridias initiates a payroll tax of 10% on all income up to $50,000.Any income above $50,000 is not taxed.This payroll tax will be:

Question

Quizplus · Accepted Answer

A regressive tax is one where the tax rate decreases as the amount subject to taxation increases. In this case, the tax rate on the first $50,000 of income is 10%, but any income above that amount is not taxed, meaning that those with higher incomes are effectively paying a lower percentage of their income in taxes.

Suppose Governor Meridias Initiates a Payroll Tax of 10% on All