The figure below show a simplified version of the current (2012)Canadian federal income- tax system.The marginal income- tax rates for the four ranges of income are 15.5%,22%,26%,and 29%,respectively.
FIGURE 18- 2
-Suppose taxes are levied in the following way.All individuals pay a tax equal to $2000 no matter what income they earn.In addition,all individuals pay 20% of all their earned income in taxes.This income- tax system is

Question

The figure below show a simplified version of the current (2012)Canadian federal income- tax system.The marginal income- tax rates for the four ranges of income are 15.5%,22%,26%,and 29%,respectively.
  FIGURE 18- 2
-Suppose taxes are levied in the following way.All individuals pay a tax equal to $2000 no matter what income they earn.In addition,all individuals pay 20% of all their earned income in taxes.This income- tax system is

Quizplus · Accepted Answer

A regressive tax system is one where the tax burden falls more heavily on those with lower incomes. In this case, everyone pays a flat rate of 20% of their income in taxes, which means that those with lower incomes are paying a higher proportion of their income in taxes compared to those with higher incomes. Additionally, the flat tax of $2000 means that the tax burden is the same for everyone, regardless of income, which also disproportionately affects those with lower incomes. Therefore, this income-tax system is regressive.

The Figure Below Show a Simplified Version of the Current