Economics · Public Finance
Why are indirect taxes often described as regressive in nature?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1They decrease in percentage as the value of the transaction increases.
- 2They are paid directly by individuals based on their earning capacity.
- 3They are charged at the same rate across all income groups, consuming a larger share of income from the poor.✓
- 4They are levied at higher percentage rates than direct taxes.
Correct answer
They are charged at the same rate across all income groups, consuming a larger share of income from the poor.
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