Question

14) Type the correct answer.

Compare and contrast a regressive tax and a progressive tax.

3-4 easy worded sentences

Answer 1

A regressive tax takes a bigger share of income from low-income people than from high-income people, because the tax rate effectively falls as income rises. A progressive tax takes a bigger share from high-income people, because the tax rate rises as income goes up. Sales taxes are often regressive, while many income taxes are progressive. Regressive taxes can increase inequality, while progressive taxes can help reduce it.