Question 33
Public FinanceAn example of a regressive tax is
- A.the personal income tax
- B.the graduated corporation income tax
- C.a general sales tax
- D.the inheritance tax
- 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.