regressive taxation


Also found in: Legal.

regressive taxation

a structure of TAXATION in which tax is levied at a decreasing rate as INCOME rises. This form of taxation takes a greater proportion of tax from the low-income taxpayer than from the high-income taxpayer. INDIRECT TAXES such as value-added tax or excise duty become regressive when taken as a proportion of total net income. For example, if an item costs £100 and value-added tax is 15%, then £15 in relation to £200 per week net pay (7 1/2 %) is greater than £15 to another person earning £600 per week net (21/2%). The burden of taxation is therefore proportionately greater on the less affluent members of society and cannot be considered an equitable tax. Compare PROGRESSIVE TAXATION, PROPORTIONAL TAXATION. See also ABILITY-TO-PAY PRINCIPLE OF TAXATION, INCIDENCE OF TAXATION, REDISTRIBUTION-OFINCOME PRINCIPLE OF TAXATION.

regressive taxation

A tax burden that falls more heavily on those with low income. Contrast with progressive tax and proportional tax. Sales taxes are regressive taxes if imposed on all sales, because the straight percentage imposed on all sales takes away a higher percentage of a lowincome household's available income.Some states attempt to lessen the regressive effect of sales taxes by exempting purchases of food and medicine. In the following table, the low-income household spends almost 5 percent of its disposable income on sales taxes, because all income after paying for housing must go to buy things that are taxable.

References in periodicals archive ?
In contrast, municipalities in large urban areas with less regressive taxation tended to have more heterogeneous housing prices and/or less unequal incomes.
According to Batra, Greenspan is responsible for the rise of regressive taxation here and abroad, budget deficits, trade deficits, rising income inequality, the loss of manufacturing jobs, shrinking paychecks, and the growth of debt worldwide.
Junko Kato, Regressive Taxation and the Welfare State: Path Dependence and Policy Diffusion.
I do have a problem with people such as former MP Peter Kilfoyle, who says 'it will be another form of regressive taxation on Britain's hard-working families'.
Lane and Bruner emphasized that the first job of the nonprofit educational group is to lead a state-wide campaign to stop the continuing regressive taxation of tobacco products.
The deductibility of property taxes and income taxes was preserved in a deliberate attempt by Congress to encourage progressive taxation and discourage regressive taxation.
There is no defense for putting a greater proportional burden on the poor, known as regressive taxation," Hamill said.
Yet Republicans who say they hate tax hikes and Democrats who claim to oppose regressive taxation somehow don't mind sticking it to this despised minority.
In a perfect capital mobility regime, if workers have no money illusion, then under a plausible set of parametric values, devaluation will decrease the output for progressive taxation while it increases the output for regressive taxation.
In the United States, the poorest people pay the largest proportion of income for health-care premiums, a form of regressive taxation.
Birnbaum deserves special commendation for suffering through such events as a press conference of the Coalition Against Regressive Taxation, a gang of brewers, distillers, cigarette makers, and trucking companies all bravely fighting excise taxes in the name of Joe Six-Pack.
Bernie Sanders' staffers are substantially involved in realizing his grassroots challenge to the GOP's irrationally exuberant 1 percent-centered platform of regressive taxation and immigrant bashing.