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Chapter 30: Q. 7 (page 741)

The social security tax is 6.2%on employees鈥� income earned below $113,000. Is this tax progressive, regressive

or proportional?

Short Answer

Expert verified

Yes, the tax is progressive.

Step by step solution

01

Step 1. Define tax.

A tax is a monetary payment made to the government in exchange for government services. Taxes are levied in almost every country on Earth, mostly to raise revenue for government spending, but they also serve other purposes.

02

Explanation of solution.

Employees earning less than 113,000dollars are subject to a 6.2percent social security tax. Yes, because high-income earners are excused from paying any taxes on their earnings of around 1,13,000dollars, this tax is progressive.

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