| 1. The one by which the revenue collected rises proportionally with income |
| 2. The rates of tax increase for increasing values or volumes on which the tax is levied |
| 3. The one where the proportion of tax paid falls as income rises |
A) 1 only
B) 2 only
C) 3 only
D) 1, 2 and 3
Correct Answer: C
Solution :
Regressive tax is one where the proportion of tax paid falls as income rises. The most regressive tax is a poll tax, levied at a fixed rate per person regardless of income. A tax system can be made regressive by having indirect taxes levied at relatively high rates on goods heavily consumed by the poor
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