A form of tax that is mildly progressive and regressive is_______

Step 1: Analyze the question We need the tax type that is described as "mildly progressive" (and, in the wording, also regressive). This is a classic definition question from Public Finance.

Step 2: Explain the concepts

• Proportional tax: the same percentage rate is charged on all income levels (e.g., 10% on ₦50,000 and 10% on ₦500,000).
• Progressive tax: the rate rises as income rises. Higher earners pay a larger percentage.
• Regressive tax: the rate falls as income rises. Lower earners bear a heavier burden relative to income.
• Digressive tax: the tax rate rises up to a certain income level, then stays constant (or rises only very slowly) beyond it. Because the rate increases at first but then the increases become much smaller, the burden on the rich does not rise in proportion to their income. This is why it is described as mildly progressive. Since high earners pay proportionally less extra than a truly progressive system would demand, it also has a regressive effect at the top.

Step 3: Work through the options

• A. Proportional: a flat rate, neither progressive nor regressive. ✗
• B. Progressive: strongly progressive, not "mild". ✗
• C. Regressive: purely regressive. ✗
• D. Digressive: combines a mild progression with a regressive feel at higher incomes. ✓

Step 4: Answer The correct option is D. Digressive tax.

Tip: Remember "Digressive = Diluted progressive". The rate rises, but only mildly, and the rise flattens out at higher incomes. If an exam question says "mildly progressive", think digressive.