Which of the Following Principles Accurately Describes a Regressive Tax

question 11

Multiple Choice

Which of the following principles accurately describes a regressive tax?

• A)A regressive tax is a fee that is applied uniformly,thus imposing a greater burden (relative to resources)on the poor than on the rich.
• B)There is an inverse relationship between the tax rate and the taxpayer's ability to pay.
• C)A regressive tax is often referred to as a fixed tax where every person has to pay the same amount of money; examples include sales tax,taxes on tobacco and alcohol,and property taxes.
• D)All of the choices are correct.

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Definitions:

LLLP

Limited Liability Limited Partnership, a form of partnership that provides limited liability to all of its partners, not just the limited partners.

Limited Liability Status

A legal status that restricts the financial liability of owners or shareholders to the amount they invested in the company.

Partnership Capital

The total amount of resources contributed by partners to a partnership for the purpose of starting or expanding the business.

Partner's Contribution

Refers to the resources (capital, property, expertise) a partner brings into a partnership.