Asked by David Hornbek Jr. on May 27, 2024
Verified
The property tax may be regressive even though wealthy people own much more taxable property than do poor people. This possibility arises because
A) marginal and average tax rates on property tend to converge.
B) wealthy people can evade property taxes, while poor people cannot.
C) property taxes on rental property and business property are shifted.
D) statutory property tax rates decline as the value of property rises.
Property Tax
Taxes levied by governments on property owners based on the value of their property, including land and buildings.
Regressive
Pertaining to a tax system where the tax rate decreases as the taxable amount increases, leading to a higher tax burden on lower-income earners.
- Understand the regressive nature of certain taxes and the factors contributing to this.
Verified Answer
DB
deann BookerMay 30, 2024
Final Answer :
C
Explanation :
Property taxes on rental and business property can be shifted to renters and consumers, respectively, making the tax regressive as it disproportionately affects those with lower incomes who end up bearing the tax burden indirectly.
Learning Objectives
- Understand the regressive nature of certain taxes and the factors contributing to this.