Asked by Paula marques on May 10, 2024
Verified
The Social Security tax is regressive because it applies only on income below a "cap" income level.
Social Security Tax
A tax levied on both employers and employees to fund the Social Security program, which provides retirement, disability, and survivorship benefits.
Regressive
Relating to a taxation mechanism where the tax rate decreases as the taxable amount increases, disproportionately affecting lower-income earners.
- Identify the backward progression characteristics of specific taxes and their reasons.
Verified Answer
MB
Mylene BaronaMay 16, 2024
Final Answer :
True
Explanation :
The Social Security tax is considered regressive because it is only applied to income up to a certain threshold (the "cap"), meaning higher income earners effectively pay a smaller percentage of their total income in Social Security taxes compared to lower income earners.
Learning Objectives
- Identify the backward progression characteristics of specific taxes and their reasons.
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