Table 18-3
Table 18-3 contains data on household spending at different income levels.Suppose that a 3 percent tax is levied on all consumption spending.
-Refer to Table 18-3.The consumption tax is
A)proportional.
B)progressive.
C)income neutral.
D)regressive.

Question

Table 18-3
  Table 18-3 contains data on household spending at different income levels.Suppose that a 3 percent tax is levied on all consumption spending.
-Refer to Table 18-3.The consumption tax is
A)proportional. 
B)progressive. 
C)income neutral. 
D)regressive.

Quizplus · Accepted Answer

A regressive tax takes a larger percentage of income from low-income earners than from high-income earners. In this case, the 3 percent consumption tax would take a larger percentage of income from households in the lower income brackets than from households in the higher income brackets, making it regressive.

Table 18-3 Table 18-3 Contains Data on Household Spending at Spending