MANAGEMENT

Detailed explanation-1: -On the other hand, in the case of a regressive tax, the tax rate decreases with an increase in income. Statement 2 is correct: Regressive taxes are not sector-specific. They can be imposed for promotion purposes in any of the sectors in the economy.

Detailed explanation-2: -regressive tax, tax that imposes a smaller burden (relative to resources) on those who are wealthier. Its opposite, a progressive tax, imposes a larger burden on the wealthy. A change to any tax code that renders it less progressive is also referred to as regressive.

Detailed explanation-3: -progressive tax-A tax that takes a larger percentage of income from high-income groups than from low-income groups. proportional tax-A tax that takes the same percentage of income from all income groups. regressive tax-A tax that takes a larger percentage of income from low-income groups than from high-income groups.

Detailed explanation-4: -The regressive tax rate line has a declining negative slope. The steeper the negative slope of the tax line, the more regressive the taxation. The degressive tax rate line has a rising slope initially, but it becomes constant after a point.

Detailed explanation-5: -Sales and excise taxes are the most regressive element in most state and local tax systems. Sales taxes inevitably take a larger share of income from low-and middle-income families than from rich families because sales taxes are levied at a flat rate and spending as a share of income falls as income rises.