2 5,5-2 Test (CST): The Government Gets involved Question 14 of 25
What is a regressive tax?
A. A tax that charges rich people more
O B. A tax that charges more to those with lower incomes
OC. A tax that takes money from people when they die
OD. A tax that is higher on harmful activities

B. A tax that charges more to those with lower incomes

Explanation:

A regressive tax imposes a heavy tax burden on low-income earners. In practice, a tax system that applies a uniform rate regardless of income level is regressive.

Low-income earners use most of their income on basic needs such as food, clothing, and shelter. Any amount deducted from their pay has a significant impact on their ability to spend on these basic items. On the other hand, high-income earners will continue living comfortably even if a percentage of their income is deducted as tax. Due to their high income, a percentage deduction does not affect their lifestyle.

A regressive tax causes financial strain on low-income earners but has no impact on the wealthy. It is contrasted by a progressive tax system, which imposes tax depending on the income le

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