Many economists believe a general sales tax (particularly on items such as food) takes a larger proportion of income from low-income households than from high-income households. If this is true, a general sales tax is a
A) regressive tax.
B) proportional tax.
C) neutral tax.
D) progressive tax.

Question

Quizplus · Accepted Answer

A regressive tax is one where the tax rate decreases as the taxable amount increases, meaning it takes a larger percentage of income from low-income earners than from high-income earners. A general sales tax on essential items like food is considered regressive because low-income households spend a larger portion of their income on these items compared to high-income households.

Many Economists Believe a General Sales Tax (Particularly on Items