Title: The Pros & Cons of Regressive Taxation | Sapling
Headings: The Pros & Cons of Regressive Taxation
The Pros & Cons of Regressive Taxation
Freedom of Choice
Discouraging Consumption
Harming the Poor
Decreased Revenues

Content: In a regressive system, all consumers pay the same dollar amount, regardless of income level. As with all forms of taxation, a regressive system offers certain advantages and disadvantages. Advertisement
Freedom of Choice
When a regressive tax is based on consumption such as a sales tax, it can introduce an element of freedom of choice. Only those who choose to use a particular product or service must pay the tax, and those who consume more frequently pay more taxes than occasional users. People also have some measure of control of how much they pay in taxes. If they wish to lower what they pay in taxes, they can elect to cut back on or discontinue the use of an item. Discouraging Consumption
A regressive tax may be used to discourage people to avoid the use of potentially harmful products. A so-called "sin tax" on products like tobacco, alcohol and pornographic materials may make it more difficult for users of these products to afford their purchase, especially those at the lower end of the economic scale who need every dollar just to get by. Governments and municipalities may implement these taxes on the assumption that there will still be enough consumption of the products to generate needed revenues. Advertisement
Harming the Poor
On the downside, a regressive tax system can be viewed as unfair because it places a greater burden on those at the lower end of the economic scale.