Suppose there is a system in which Person A earns $10,000 and pays $1,000 in taxes, Person B earns $25,000 and pays $1,000 in taxes, and Person C earns $60,000 and pays $1,000 in taxes.What type of taxation is this?

Question

Quizplus · Accepted Answer

This is an example of a regressive tax system, where the tax rate decreases as the amount subject to taxation increases. In this scenario, all individuals pay the same amount in taxes ($1,000), which means that as income increases, the effective tax rate (percentage of income paid in taxes) decreases. This is characteristic of a regressive tax system.

Suppose There Is a System in Which Person a Earns