Asked by Heather Robertshaw on Apr 30, 2024
Verified
The tax on cigarettes is
A) regressive and indirect.
B) regressive and direct.
C) progressive and indirect.
D) progressive and direct.
Regressive
A term usually used to describe a tax system in which the tax rate decreases as the taxable amount increases, effectively placing a higher burden on lower-income earners.
Indirect
Pertains to actions, effects, or financial transactions that are not direct or straightforward, often referring to indirect taxes or costs.
Direct
A straightforward approach or method that does not involve intermediaries or detours.
- Attain an insight into the various tax types, such as proportional, progressive, and regressive taxes, along with their effects.
- Understand the impact of specific taxes, such as excise taxes on consumer goods.
Verified Answer
ZK
Zybrea KnightMay 05, 2024
Final Answer :
A
Explanation :
The tax on cigarettes is considered regressive because it falls disproportionately on low-income individuals who are more likely to smoke, and it is an indirect tax because it is levied on the manufacturer or importer of cigarettes and ultimately passed on to the consumer in the form of higher prices.
Learning Objectives
- Attain an insight into the various tax types, such as proportional, progressive, and regressive taxes, along with their effects.
- Understand the impact of specific taxes, such as excise taxes on consumer goods.