WAEC Economics 2015 Theory — Question 5

Model answer

A regressive tax is a system of taxation in which the tax rate charged decreases as the income of the payer increases, and vice versa. On a graph with income on the x-axis and tax rate (%) on the y-axis, the curve slopes downward from left to right - starting high at low income levels and falling continuously as income rises, illustrating that lower earners pay proportionately more of their income in tax than higher earners.