A tax that charges all individuals the same amount, and therefore, exacts a larger percentage, of income from the lower-wage earner than it does from the high-income earner, is referred to as a _____________ tax.

Question

​A tax that charges all individuals the same amount, and therefore, exacts a larger percentage, of income from the lower-wage earner than it does from the high-income earner, is referred to as a _____________ tax.

Quizplus · Accepted Answer

A regressive tax charges the same amount to all individuals, regardless of income level. However, because a fixed amount of tax represents a larger percentage of income for low-wage earners than high-wage earners, the burden falls disproportionately on the poor, making it regressive in nature. A flat tax, on the other hand, charges a uniform percentage of income, meaning that it affects everyone equally, regardless of income level. A progressive tax, in contrast, aims to distribute the tax burden more fairly by charging higher rates to those with higher incomes. Social Security and dependency are not relevant to this question.

​A Tax That Charges All Individuals the Same Amount, and Therefore

A Tax That Charges All Individuals the Same Amount, and Therefore