Regressive Tax

Regressive Tax
A tax that takes a larger percentage from low-income people than from high-income people. A regressive tax is generally a tax that is applied uniformly. This means that it hits lower-income individuals harder.

Some examples include gas tax and cigarette tax. For example, if a person has $10 of income and must pay $1 of tax on a package of cigarettes, this represents 10% of the person's income. However, if the person has $20 of income, this $1 tax only represents 5% of that person's income.

Sales taxes that apply to essentials are generally considered to be regressive as well because expenses for food, clothing and shelter tend to make up a higher percentage of a lower income consumer's overall budget. In this case, even though the tax may be uniform (such as 7% sales tax), lower income consumers are more affected by it because they are less able to afford it.


Investment dictionary. . 2012.

Игры ⚽ Нужен реферат?

Look at other dictionaries:

  • regressive tax — UK US noun [countable] [singular regressive tax plural regressive taxes] a tax system in which poor people pay a bigger percentage of their income than rich people Thesaurus: types of tax and taxationhyponym …   Useful english dictionary

  • regressive tax — A tax with a rate that decreases as the taxpayer s income increases. Dictionary from West s Encyclopedia of American Law. 2005. regressive tax A tax with a rate that decreases as the taxpayer s income i …   Law dictionary

  • Regressive tax — A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases. [ [http://www.merriam webster.com/dictionary/Regressive Webster] (3): decreasing in rate as the base increases (a… …   Wikipedia

  • regressive tax — A tax system that provides that average tax rates decrease with increases in individuals income brackets. Bloomberg Financial Dictionary * * * regressive tax regressive tax ➔ tax1 * * * regressive tax UK US noun [C] TAX ► a tax in which poor… …   Financial and business terms

  • regressive tax — UK / US noun [countable] Word forms regressive tax : singular regressive tax plural regressive taxes a tax system in which poor people pay a bigger percentage of their income than rich people …   English dictionary

  • regressive tax — Tax levied at a rate that decreases as its base increases. Regressivity is considered undesirable because poorer people pay a greater percentage of their income in tax than wealthier people. Consumption taxes and sales taxes are usually… …   Universalium

  • regressive tax — A tax in which the rate of tax decreases as income increases. Indirect taxes fall into this category. Regressive taxes are said to fall more heavily on the poor than on the rich; for example, the poor spend a higher proportion of their incomes on …   Big dictionary of business and management

  • regressive tax — 1. A *taxation system in which *tax rates decrease with higher levels of taxable income. Contrast *progressive tax. 2. A *taxation system which is considered to favor the wealthy and cause hardship to poorer individuals. For example, a taxation… …   Auditor's dictionary

  • regressive tax — re gressive .tax n a tax that has less effect on the rich than on the poor …   Dictionary of contemporary English

  • regressive tax — re,gressive tax noun count a tax system in which poor people pay a bigger percentage of their income than rich people …   Usage of the words and phrases in modern English

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”