Assume that you pay $10,000 of tax on a taxable income of $50,000. If your taxable income were $150,000, your tax payment would be $25,000. This suggests the tax is

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The tax is regressive because the tax rate decreases as the taxable income increases. Initially, the tax rate is 20% ($10,000 on $50,000), but it decreases to approximately 16.67% ($25,000 on $150,000).

Assume That You Pay $10,000 of Tax on a Taxable