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JAMB Economics 1985 Question 33

Question 33

Public Finance

An example of a regressive tax is

  1. A.the personal income tax
  2. B.the graduated corporation income tax
  3. C.a general sales tax
  4. D.the inheritance tax
  5. E.the excise tax.
Show the answer and explanation

Answer: C (a general sales tax)

Explanation

Everyone pays the same sales tax on what they buy, so it takes a bigger share of a poor person's income: it is regressive.