John Gates made $25,000 last year and paid taxes on this income of $2,500.Jane Smith made $30,000 last year and paid taxes on this income of $2,700.What type of tax is the government using?

Question

Quizplus · Accepted Answer

A regressive tax is one where the tax rate decreases as the taxable amount increases. In this case, John paid 10% of his income in taxes, while Jane paid 9%, indicating a regressive tax system.

John Gates Made $25,000 Last Year and Paid Taxes on This