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 ?
Amid strong protests from opposition parties, and a hype created around a so-called populist budget, ruling party may have presented the budget much to the relief of businesses and businessmen, but, in fact, certain regressive taxation measures can lead to inflation.
With regressive taxation being done on the peasant complementing poverty, there was a high chance that an anti status quo sentiment would develop.
Domestic markets continue to suffer from distortions due to a high degree of government participation, excessive and cumbersome regulation, regressive taxation and lack of competition.
(21) Regressive taxation implies a disproportionate tax levied on the poor for the provision of public goods.
The problem with inequality is not only that it obstructs the pursuit of collective goals and the common good; it also erects structural barriers to development, for example, through meager or regressive taxation and underinvestment in education, health, or infrastructure.
The problem with inequality is not only that it obstructs the pursuit of collective goals and the common good; it also erects structural barriers to development-for example, through meager or regressive taxation and underinvestment in education, health or infrastructure.
It's because our so-called "leaders" are ignoring Oregon's regressive taxation policies, huge timber tax subsidies and the unrestrained export of raw logs and wood chips.
Dig further and you will find a curious free market mix of regressive taxation, charges to see your doctor and a strange pledge, in the 2010 manifesto, to make the Circle Line a circle again.
Making things worse were gargantuan corruption scandals and retrograde and regressive taxation policies which spooked genuine investors.
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.