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: Understanding Regressive Taxes
Sales Taxes
User Fees
Property Taxes
Flat Taxes
"Sin" Taxes
What Is a Regressive Tax? A regressive tax is a tax applied uniformly, taking a larger percentage of income from low-income earners than from high-income earners. It is in opposition to a progressive tax, which takes a larger percentage from high-income earners. 1:32
Regressive Tax
Key Takeaways
A regressive tax is a type of tax that is assessed regardless of income, in which low- and high-income earners pay the same dollar amount. This kind of tax is a bigger burden on low-income earners than high-income earners, for whom the same dollar amount equates to a much larger percentage of total income earned. 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.