Which of the following is a regressive tax?
A) a state tax of 5 percent of income
B) a local sales tax of 5 percent
C) the federal individual income tax
D) a federal flat tax of 30 percent

Question

Quizplus · Accepted Answer

A regressive tax takes a larger percentage of income from low-income earners than from high-income earners. A local sales tax of 5 percent is considered regressive because low-income earners spend a larger portion of their income on taxable goods than high-income earners. State taxes and the federal individual income tax are considered progressive taxes because they take a larger percentage of income from high-income earners than low-income earners. A federal flat tax of 30 percent is considered a flat tax because it is a fixed percentage of income for all earners, regardless of income level.

Which of the Following Is a Regressive Tax