regressive tax (redirected from Regressive Taxes)

Regressive Tax

A tax that takes a larger percentage from the income of low-income people than the income of high-income people.

Notes:

Some examples include gas tax and cigarette tax.

See also: Flat Tax, Income Tax, Progressive Tax

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Regressive tax

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

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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.