Which of the following is True?
A) A regressive tax rate structure imposes an increasing marginal tax rate as the tax base increases.
B) Regressive tax structures are the most common tax rate structure.
C) An example of a regressive tax is an excise tax.
D) In terms of effective tax rates, a sales tax can be viewed as a regressive tax.
E) None of the choices are correct.

Question

Quizplus · Accepted Answer

A sales tax can be viewed as a regressive tax because it imposes a higher burden on low-income households, as they spend a larger percentage of their income on taxable goods compared to high-income households. Option A is false because a regressive tax structure imposes a decreasing marginal tax rate as the tax base increases. Option B is false because progressive tax structures are the most common tax rate structure. Option C is true, as an excise tax is typically levied on goods that are consumed more heavily by low-income households, such as cigarettes and alcohol, making it regressive.

Which of the Following Is True