Suppose that the average tax rate is 25 percent for an income level of $50,000 and 20 percent for an income level of $80,000. This implies that the underlying tax structure is regressive.

Question

Quizplus · Accepted Answer

A regressive tax structure means that the tax rate decreases as income increases. In this case, the tax rate decreases from 25% to 20% as income increases from $50,000 to $80,000, which indicates a regressive tax structure.

Suppose That the Average Tax Rate Is 25 Percent for an Income