Social Security withholding is an example of a(n)___________.A.progressive taxB.regressive taxC.estate taxD.state taxSUBMITarrow_backPREVIOUS

Break Down the Problem

1. Identify the types of taxes presented in the options.
2. Classify the Social Security withholding.

Relevant Concepts

1. Progressive Tax: Tax rates increase as income increases.
2. Regressive Tax: Tax rates decrease as income increases, disproportionately impacting lower-income individuals.
3. Estate Tax: Tax on the transfer of property after death.
4. State Tax: Taxes levied by a state government.

Analysis and Detail

Social Security withholding is based on a fixed percentage of earnings, meaning that lower earners pay a higher proportion of their income compared to higher earners. This characteristic exemplifies a regressive tax structure.

Verify and Summarize

Given that Social Security withholding takes a constant percentage regardless of income level, it represents a regressive tax.

Final Answer

B. regressive tax