Regressive Tax Definition

Steps:

• Recall that taxes are classified by how the tax rate affects different income levels: progressive, proportional, or regressive.
• Define regressive tax as one where the tax rate decreases as income increases, burdening low earners more proportionally.
• Compare each option to this definition.
• Select the option matching the proportional burden on low-income earners.

Why B is correct:

• A regressive tax, by definition, imposes a higher effective tax rate on low-income earners relative to their income, as seen in sales taxes that consume a larger income share for the poor.

Why the others are wrong:

• A describes a proportional tax, where everyone pays the same income percentage.
• C misstates the concept by focusing on total tax amount, not the proportional rate.
• D describes a progressive tax outcome in absolute terms, not regressive.

Final answer: B