<p>You're correct it is graph A. Regressive tax means that the lower income you have the higher %tax you have. If you imagine at the lowest level of income, you still have a flat tax(The intercept).</p>

<p>Since the slope is constant the %tax component is the same for all income levels.</p>

<p>Therefore this flat tax component is the part you need to look at. The flat tax represents a larger proportion for lower income earners. As a whole (%tax + Flat tax) the tax is then a higher % for lower income earners, hence regressive taxation.</p>

CC BY-SA 3.0
2015-06-01T22:00:18.300Z
2015-06-01T22:00:18.300Z
Lee Sin
<p>I have a mock-up exam that my teacher gave me and one of the questions was the following:</p>

<blockquote>
  <p>Given these four graphs, which one represents regressive tax?</p>
</blockquote>

<p>I'm quite sure it's graph A, but I don't seem to be able to find a proper reason why. Any help and/or tips are welcome!</p>

<p>Thanks in advance</p>

<p>EDIT: As per request. How I interpret this: regressive means the higher the income, the lower the tax. Thus: tax drops with higher incomes. But I can't really determine to which graph this applies.</p>

<p><img src="https://i.sstatic.net/5EPOG.png" alt="enter image description here"></p>

<p>(T is tax, Y is income)</p>

CC BY-SA 3.0
2015-06-01T18:25:57.270Z
Perhaps you could add what you think "Regressive" means in your own words, and then try to come up what that means mathematically?
FooBar
CC BY-SA 3.0
2015-06-01T18:41:19.833Z
Is T a tax rate or taxes in units of Y?
BKay
CC BY-SA 3.0
2015-06-01T18:45:10.237Z
@FooBar I edited my question ;)
Robin Haveneers
CC BY-SA 3.0
2015-06-01T18:46:18.187Z
@BKay Good question, I'm quite sure it's taxes in units of Y. I'm from Belgium but if I try and translate it's: "total indebted tax"
Robin Haveneers
CC BY-SA 3.0
2015-06-01T19:40:41.977Z
Don't you mean "*the higher the income, the lower the **marginal** tax*"?
FooBar
CC BY-SA 3.0
2015-06-01T19:59:30.823Z
@FooBar yes, that's what I meant. I have the feeling that I'm missing/overlooking something very easy/trivial ;)
Robin Haveneers
CC BY-SA 3.0
2015-06-01T20:08:57.210Z
As a first step, try drawing what the average and marginal tax rates look like. That might help.
cc7768
<taxation>
How to determine regressive tax
Robin Haveneers
# How to determine regressive tax

(Asked by: username_0 on 2015-06-01)

I have a mock-up exam that my teacher gave me and one of the questions was the following:

> Given these four graphs, which one represents regressive tax?

I'm quite sure it's graph A, but I don't seem to be able to find a proper reason why. Any help and/or tips are welcome!

Thanks in advance

EDIT: As per request. How I interpret this: regressive means the higher the income, the lower the tax. Thus: tax drops with higher incomes. But I can't really determine to which graph this applies.

![enter image description here](https://i.sstatic.net/5EPOG.png)

(T is tax, Y is income)

**Tags:** taxation

> **Comments:**
> **username_1**: Perhaps you could add what you think "Regressive" means in your own words, and then try to come up what that means mathematically?  
> **username_2**: Is T a tax rate or taxes in units of Y?  
> **username_0**: @username_1 I edited my question ;)  
> **username_0**: @username_2 Good question, I'm quite sure it's taxes in units of Y. I'm from Belgium but if I try and translate it's: "total indebted tax"  
> **username_1**: Don't you mean "*the higher the income, the lower the **marginal** tax*"?  
> **username_0**: @username_1 yes, that's what I meant. I have the feeling that I'm missing/overlooking something very easy/trivial ;)  
> **username_3**: As a first step, try drawing what the average and marginal tax rates look like. That might help.  

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## 1 answers

### Answer by username_4 on 2015-06-01. Score: 4 | Accepted answer

You're correct it is graph A. Regressive tax means that the lower income you have the higher %tax you have. If you imagine at the lowest level of income, you still have a flat tax(The intercept).

Since the slope is constant the %tax component is the same for all income levels.

Therefore this flat tax component is the part you need to look at. The flat tax represents a larger proportion for lower income earners. As a whole (%tax + Flat tax) the tax is then a higher % for lower income earners, hence regressive taxation.


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