Which of the Following Statements About a Regressive Tax Rate

question 72

Multiple Choice

Which of the following statements about a regressive tax rate structure is false?

• A) A regressive rate structure cannot result in vertical equity.
• B) Regressive rates decrease as the tax base increases.
• C) A regressive rate structure places a proportionally heavier tax burden on taxpayers with smaller tax bases than persons with greater tax bases.
• D) None of these choices are false.

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Definitions:

Units-Of-Activity

A depreciation method where the expense is based on the actual usage or activity of the asset rather than the passage of time.

Production Based

A method or approach that focuses on enhancing the efficiency and output of the manufacturing process, often measured against set production targets.

Straight-Line

A method of allocating the cost of an asset evenly over its useful life for the purposes of depreciation or amortization.

Declining-Balance

A method of depreciation where an asset loses value at a rate that decreases over time, opposite of straight-line depreciation.