Question

Congress is considering enacting a tax system that will cause the following results: * When income...

Congress is considering enacting a tax system that will cause the following results: * When income is $13,000, tax will be $975. * When income is $86,000, tax will be $6,600. This type of tax structure is regressive. True False

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Answer #1

As the income rises more taxes are required to be paid and this type of tax structure is called as progressive tax structure. In this tax structure rich people are made to pay more taxes as they earn more as compared to poor People.

This type of tax structure bring in the equality withing the people of country as the rich will be paying more taxes as compared to poor people.

On the other hand regressive tax structure is a type of tax structure wherein both the rich and poor pays the same tax but at the end poor are made to pay higher taxes on basis of their earnings.

So the correct option is False.

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