PRC-3 · Chapter 16 · Question 12 of 20
If a government imposes a fixed Rs. 100 tax on every citizen regardless of whether they earn Rs. 10,000 or Rs. 10 million, this tax takes a much heavier toll on the poor. This is a:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Regressive tax
Explanation
A regressive tax takes a larger proportion of income from the poor than from the rich, directly violating the principle of equity.
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