Which of the following statements concerning a regressive tax rate structure is true?
A) A regressive tax rate structure is justified by the tax policy of distributive justice.
B) A regressive rate structure is justified by the theory of the declining marginal utility of income.
C) Under a regressive rate structure, the average tax rate for high-income taxpayers is less than the marginal tax rate.
D) None of the statements are true.

Question

Quizplus · Accepted Answer

A regressive tax rate structure is characterized by a decrease in the tax rate as the base (such as income or consumption) increases, which contradicts the principles of distributive justice and the theory of declining marginal utility of income. Additionally, in a regressive system, the average tax rate typically decreases as income increases, not specifically comparing it to the marginal tax rate in the manner described.

Which of the Following Statements Concerning a Regressive Tax Rate