Question

With a___tax, the tax decreases as income increases.

A.)Direct
B.)Progressive
C.)Proportional
D.)Regressive

Answer 1

D. Regressive tax. The tax rate decreases as the taxable income increases. There is an inverse relationship between the tax rate and the tax base (taxable income). Regressive tax imposes a greater burden on the poor. This is favorable to the rich or those who are huge income earners.