Question 7 Which of the following taxes is regressive? aa tax of 25% on the first $100,000 of income and of 20% on any additional incomeba tax of 15% on capital gains and interest incomeca tax of 50% on inheritance incomeda tax of 20% on the first $100,000 of income and 30% on any additional income

Taxes are the monetary amount that a citizen of the country has to pay to its Government. Later,…

Answered: Question 7 Which of the following…

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter3: Economic Decision Makers

Section: Chapter Questions

Problem 3.10P

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Question 7

Which of the following taxes is regressive?

a tax of 25% on the first $100,000 of income and of 20% on any additional income

a tax of 15% on capital gains and interest income

a tax of 50% on inheritance income

a tax of 20% on the first $100,000 of income and 30% on any additional income

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

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