In a regressive tax rate structure:
A) the average tax rate is lower than the marginal tax rate.
B) the average tax rate increases with the size of the tax base.
C) the average tax rate decreases as the size of the tax base increases.
D) the average tax rate does not vary with the size of the tax base.

Question

Quizplus · Accepted Answer

In a regressive tax rate structure, the average tax rate decreases as the size of the tax base increases. This means that as individuals or entities earn more, the proportion of their income paid in taxes decreases.

In a Regressive Tax Rate Structure