regressive taxation


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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 ?
Income Inequality & Regressive Taxation in the United States", [2015] 4:3 Interdisciplinary Journal of Economics & Business Law 8 ("[T]he IRS tax return data compilations of Piketty & Saez reflect solely reported 'taxable income' and not unrealized gains that are not currently taxable and therefore not reported to the IRS at all.
Plans ahead include monthly luncheons with a prominent speaker on current business issues, meetings with US and Bahraini officials, trade delegations, and committees addressing industry-specific concerns relevant to issues such as standardisation, understanding and using the FTA fully, labour and transportation issues, and regressive taxation of expatriates.
Public policies that entrench financial inequalities, such as through regressive taxation plans or tax cuts for the wealthy, could also lead to more cheating inside and outside the office.
Inequalities can be explained by regressive taxation, the monopolizing of housing wealth by the elites, and the undervaluing of rural land.
Ed Miliband'are failing the Tories "Having heard Labour''s alleged objections to this regressive taxation policy time and again last week, the inaction of its party members showed astonishing hypocrisy," he said.
Concerns including rising prices of basic commodities and high and regressive taxation, which places a heavy burden on the poor, while making allowances for the rich, topped the list of grievances.
He said that government should accord high priority to addressing problems of energy shortage, high utility tariffs, regressive taxation, high interest rate and surging inflation which he said were the major impediments in expanding business activities.
The Scandinavian model of a cradle-to-grave welfare state financed largely through regressive taxation is not regarded as punitive to the poor.
It is time we recognised that regressive taxation, and the inequality that it helps to maintain, is both socially and economically dysfunctional.
My gambling's a problem, because in a public spending budget shored up by regressive taxation of various shades of inequity - VAT, council tax, duties on alcohol, tobacco, petrol - the punting 'tax' is a very special plum.
Perhaps the reason Barbara Bush made that desolate statement is that she, a member of a new patrician class psychopathologically insulated from real life America, can relate no better to poverty than can her son, whose regressive taxation, attempts to undermine Social Security, shameless facilitation of Rx company and "friendly" contractor interests, and deployment of the poor as cannon fodder in Iraq speak to a profound disconnect with the wants and needs of our country.
That's regressive taxation that just hurts those who can afford it the least.