Larger share of income for those with high incomes

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The payroll tax is levied at a rate of 15.3% of a worker’s earnings, up to a ceiling. For workers with earnings greater than the ceiling, the tax rate is only 2.9%. Also, the payroll tax does not apply to capital income, which is a larger share of income for those with high incomes. For these reasons, the payroll tax is a) proportional at high incomes. b) progressive at high incomes. c) regressive at high incomes. d) Not enough information has been given to answer the question. e) All of the above

Reference no: EM13985771

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