Overall, the tax system in Texas is generally considered to be regressive, which means that:

• A. Taxes are only levied on businesses and not on individuals.
• B. Higher-income individuals pay a higher percentage of their income in taxes than lower-income individuals.
• C. All individuals pay the same percentage of their income in taxes, regardless of income level.
• D. Lower-income individuals pay a higher percentage of their income in taxes than higher-income individuals.

Answer: (D)

Verified step by step guidance

1. Understand the definition of a regressive tax system: In a regressive tax system, the tax rate decreases as the taxpayer's income increases, meaning lower-income individuals pay a higher percentage of their income in taxes compared to higher-income individuals.
2. Analyze each option by comparing it to the definition of regressivity: For example, if taxes are only levied on businesses and not individuals, this does not describe regressivity because it excludes individuals entirely.
3. Evaluate the option stating that higher-income individuals pay a higher percentage of their income in taxes: This describes a progressive tax system, which is the opposite of regressive.
4. Consider the option where all individuals pay the same percentage of their income in taxes: This describes a proportional or flat tax system, not a regressive one.
5. Identify the correct description of a regressive tax system as the one where lower-income individuals pay a higher percentage of their income in taxes than higher-income individuals, matching the definition precisely.