Question
Which of the following taxes uses a regressive tax rate structure?
Multiple choice question.
Gift tax
State sales tax
Federal income tax
Social security tax
Multiple choice question.
Gift tax
State sales tax
Federal income tax
Social security tax
Answers
GPT-4o mini
The tax that uses a regressive tax rate structure from your list is the **state sales tax**.
A regressive tax means that the tax rate decreases as the amount subject to taxation increases, which often disproportionately affects lower-income individuals because they tend to spend a larger percentage of their income on taxed goods and services.
Here's a brief overview of the other options:
- **Gift tax**: Generally progressive due to higher rates on larger gifts.
- **Federal income tax**: Progressive, as it applies higher rates to higher income brackets.
- **Social security tax**: While primarily a flat rate up to a certain income level, it can have regressive characteristics because income above that level is not taxed.
Therefore, the correct answer is **state sales tax**.
A regressive tax means that the tax rate decreases as the amount subject to taxation increases, which often disproportionately affects lower-income individuals because they tend to spend a larger percentage of their income on taxed goods and services.
Here's a brief overview of the other options:
- **Gift tax**: Generally progressive due to higher rates on larger gifts.
- **Federal income tax**: Progressive, as it applies higher rates to higher income brackets.
- **Social security tax**: While primarily a flat rate up to a certain income level, it can have regressive characteristics because income above that level is not taxed.
Therefore, the correct answer is **state sales tax**.