Title: Regressive Tax Definition
Headings: Regressive Tax
Regressive Tax
What Is a Regressive Tax?
Regressive Tax
Key Takeaways
Understanding Regressive Taxes
Sales Taxes
User Fees
Property Taxes
Flat Taxes
"Sin" Taxes

Content: A regressive system differs from a progressive system, in which higher earners pay a higher percentage of income tax than lower earners. In the U.S. and certain other developed nations, a progressive tax is applied to income, but other taxes are levied uniformly, such as sales tax and user fees. Understanding Regressive Taxes
A regressive tax affects people with low incomes more severely than people with high incomes because it is applied uniformly to all situations, regardless of the taxpayer. While it may be fair in some instances to tax everyone at the same rate, it is seen as unjust in other cases. As such, most income tax systems employ a progressive schedule that taxes high-income earners at a higher percentage rate than low-income earners, while other types of taxes are uniformly applied. Although the United States has a progressive taxation system when it comes to income tax, meaning higher income earners pay a higher percentage of taxes each year compared to those with a lower income, we do pay certain levies that are considered to be regressive taxes. Some of these include state sales taxes, user fees, and to some degree, property taxes. A regressive tax system is more common in less developed countries, where there may be a greater number of people in the same income bracket, thus reducing the negative impact of the regressive tax. Sales Taxes
Governments apply sales tax uniformly to all consumers based on what they buy. Even though the tax may be uniform (such as a 7 percent sales tax ), lower-income consumers are more affected.