Regressive tax

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Regressive tax

A tax system that provides that average tax rates decrease with increases in individuals' income brackets.

Regressive Tax

A tax that is applied to all persons equally and therefore adversely affects persons with lower income. For example, if a city institutes a 5% sale tax on groceries, everyone who buys groceries (that is, everyone) must pay 5% extra. Because the poor and the lower middle class make less money than other classes, the extra 5% is more difficult for them to afford. As a result, regressive taxes are less popular among left-wing political groups. However, proponents argue that regressive taxes are fair, at least to a certain extent, because they do not punish success.

regressive tax

A tax that has a rate that declines as the amount to be taxed increases. In terms of income, federal and state taxation of cigarettes is regressive because low-income smokers pay a higher rate of taxation in terms of their income than high-income smokers do. A system of regressive taxation tends to free more funds for investment because high-income individuals tend to save a greater portion of their income. However, a regressive tax is often considered socially and politically unacceptable. Compare progressive tax.

Regressive tax.

A regressive or flat income tax system taxes everyone at the same rate, as sales tax does.

Advocates say it's simpler and does away with the kinds of tax breaks that tend to favor the wealthy. Opponents say that middle-income taxpayers carry too large a proportion of the total tax bill.

References in periodicals archive ?
She said: "Fine Gael and Labour's regressive taxes attack the family home.
Raising the gas tax and raising the cigarette tax are both regressive taxes.
I am on record both locally and nationally as saying it is one of the most ill-thought out and regressive taxes that I have ever seen.
Regressive taxes are taxes that take a larger share of income from middle- and low-income groups than from higher income groups; proportional taxes take the same percentage of income from all, regardless of income; progressive taxes take a larger proportion of income from higher income groups than from lower income groups (Institute on Taxation and Economic Policy [ITEP], 2005).
The lack of a judicious balance between direct and indirect taxes and the levy of regressive taxes in the garb of income tax and petroleum development surcharge has pushed an overwhelming majority of Pakistanis towards the poverty line.
The net result would be slightly less regressive taxes in Oregon.
It has already introduced regressive taxes on cars to force the most polluting - and generally the oldest - off the road.
The county would be better served to work toward restoring its authority to budget for essential services using less regressive taxes.
At a stroke this would reduce inflation, allow lower interest rates and provide the Government with revenue for infrastructure improvements which would feed back into higher land values and generate additional tax yields once again - allowing further reductions in regressive taxes like VAT and ending reliance on long-term PFI swindles.
They are poor not because they're lazy but because they are paid poverty wages while burdened by high prices, high rents, and regressive taxes.
The report indicates that municipalities (such as Montreal, Toronto and Vancouver) often have more regressive taxes because they tend to have relatively unequal income distributions, and/or relatively homogeneous housing prices.