Mr.Thomson had a before-tax income of $20,000 and paid taxes of $2,000.Ms.Lynch had a before-tax income of $10,000 and paid taxes of $1,500.Based on this information,which of the following is correct?

Question

Quizplus · Accepted Answer

The tax system is regressive because as income increases, the amount of taxes paid decreases as a percentage of income. In this case, Mr. Thomson paid 10% of his income in taxes while Ms. Lynch paid 15% of her income in taxes. This means that the tax system is taking a larger percentage of a lower-income person's earnings, making it regressive.

MrThomson Had a Before-Tax Income of $20,000 and Paid Taxes