A Regressive Tax

question 30

Multiple Choice

A regressive tax:

• A)​is designed to take a larger percentage of higher incomes as compared to lower incomes.
• B)​is designed in such a way that as a person's income rises, the amount of tax as a proportion of income rises.
• C)​takes a greater proportion of the income of lower-income groups than of higher-income groups.
• D)​is considered to be the most equitable type of tax.

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Definitions:

Break-even Point

The break-even point is the point at which total costs and total revenues are equal, meaning the business is neither making a profit nor a loss.

Variable Costs

Costs that change directly and proportionately with the level of production or business activity.

Break-even Point

The level of sales at which total revenues equal total costs, resulting in no profit or loss.

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business, such as rent, salaries, and insurance.