Regressive Tax in Income Distribution

Steps:

• Review diagram: tax percentage declines as income rises.
• Define tax types: progressive (rate rises), proportional (rate constant), regressive (rate falls).
• Compare pattern: decreasing percentage matches regressive definition.
• Confirm: lower incomes pay higher effective rate relative to total.

Why D is correct:

• Regressive tax burdens lower earners more, as effective rate decreases with higher income per standard economic definition.

Why the others are wrong:

• A: Direct refers to taxes on income/wealth directly, not rate progression.
• B: Progressive features increasing rates with income, opposite of diagram.
• C: Proportional applies uniform rate across incomes, not decreasing.

Final answer: D