Suppose George's income is $10,000 and he pays a tax of $1,000, but Laura's income is $50,000 and she pays a tax of $4,000. Such a tax is:

Question

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A regressive tax system imposes a lower tax rate on individuals who earn higher incomes. In this scenario, George pays 10% of his income ($1,000/$10,000), while Laura pays 8% of her income ($4,000/$50,000), indicating that as income increases, the tax rate decreases, which is characteristic of a regressive tax system.

Suppose George's Income Is $10,000 and He Pays a Tax