Question

Which of the following is an example of a regressive tax?

• A. Sales tax
• B. Income tax
• C. Property tax
• D. Corporate tax

Answer 1

Answer:

A. Sales tax

• A regressive tax takes a larger percentage of income from low-income earners than from high-income earners.

• A sales tax on essential goods is a good example, as it represents a larger portion of a lower-income person's budget.