alleryStart learning →The Social Security payroll tax is proportional only up to which point?
AThe federal budget
BThe wage limit
CThe tax deadline
DThe retirement age
Answer & Solution
Correct answer: B. The wage limit
1. One tax changes character partway up the income scale.
2. The Social Security payroll tax is proportional up to the wage limit.
3. Above that level it becomes a regressive tax.
4. So the same tax is proportional then regressive.
_Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 16 'Government Budgets and Fiscal Policy'_
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