Title: Difference Between Progressive and Regressive Tax (with Comparison Chart) - Key Differences
Headings: Difference Between Progressive and Regressive Tax
Difference Between Progressive and Regressive Tax
Content: Progressive Tax Vs Regressive Tax
Comparison Chart
Definition of Progressive Tax
Definition of Regressive Tax
Key Differences Between Progressive and Regressive Tax
Conclusion

Content: Simply put, the regressive tax is one in which high tax is collected from low-income earners and low from high-income earners. The regressive tax is applied in a uniform manner, i.e. the tax is fairly imposed on all consumers regardless of their level of income, on the basis of what they own or purchase. But, because the tax is not associated with income, the low-income group are severely affected by it, has they have to pay a higher share of their income as the tax on necessities. Therefore, the incidence of the tax, falls more on poor people than on rich, as the relationship between tax payer’s ability and the rate of tax is inverse. For example, Value Added Tax charged fairly to all customers, but lower section of society is highly affected by it. Key Differences Between Progressive and Regressive Tax
The differences between progressive and regressive tax can be drawn clearly on the following grounds: The progressive tax is a taxing mechanism wherein, the tax rate rises with the rise in the taxable amount. Regressive Tax is a tax system in which the tax rate falls with the increase in the amount subject to tax
In progressive tax system, the tax is imposed on income or profit, on the basis of increasing rate schedule. As opposed to the regressive tax, wherein the tax is charged as a percentage of the asset purchased or owned by the assessee. In progressive tax system, the assessee’s ability to pay is considered.