The current social security program, financed by payroll taxes, is capped at just over US$118,500 of income. This is an example of ______.
A) a regressive tax
B) an unfunded mandate
C) a progressive tax
D) privatization

Question

Quizplus · Accepted Answer

The cap on social security taxes means that those who earn more than the capped amount are not required to pay social security taxes on their additional income. This makes it a regressive tax, as those with higher incomes pay a lower percentage of their income towards social security.

The Current Social Security Program, Financed by Payroll Taxes, Is