Answer:
A) The first household.
Explanation:
The tax of the first household = $20,000 x 20% = $4000
The tax of the second household = $47,000 x 17.5% = $8225
The tax of the third household = $50,000 x 13% = $6500
The tax of the first household = $71,000 x 10% = $7100
A regressive tax is a tax applied uniformly, taking a larger percentage of income from low-income earners than from high-income earners. It is in opposition to a progressive tax, which takes a larger percentage from high-income earners.
Hence Household A which earns the lowest income pays the highest tax
Answer:
A) The first household.
Explanation:
A regressive tax is basically a tax whose rate increases as your income decreases. Generally you do not need to increase the marginal tax rate of lower income levels, all you need to do is have a flat tax that taxes everyone with the same amount. E.g. everyone pays $2,000 as income taxes. $2,000 per person represents 10% of the first household's income, but it only represents 2.7% of the fourth household's income.
On the other hand, progressive taxes increase as the income level of the taxpayers increases.
