Asked by Cristian Perez Lara on Jul 21, 2024
Verified
Which statement is false?
A) A poor person who smokes pays a higher percentage of her income in cigarette excise tax than a rich person.
B) The cigarette excise tax is a regressive tax.
C) The cigarette excise tax is a direct tax.
D) None is false.
Excise Tax
Excise tax is a specific type of tax imposed on certain goods, services, and activities, often included in the price of products like tobacco, alcohol, and gasoline.
Regressive Tax
A tax system where the tax rate decreases as the taxable amount increases, putting a higher relative burden on lower-income earners.
Direct Tax
A tax directly paid to the government by the individual or organization upon whom it is imposed, such as income tax.
- Recognize the types of taxes (regressive, progressive) and their effects on different income groups.
Verified Answer
JS
Jesse Smith JrJul 26, 2024
Final Answer :
C
Explanation :
The cigarette excise tax is an indirect tax, which is a tax on consumption rather than income or wealth.
Learning Objectives
- Recognize the types of taxes (regressive, progressive) and their effects on different income groups.