Title: What Is the Difference Between Progressive, Regressive & Proportional Taxes? | Sapling
Headings: What Is the Difference Between Progressive, Regressive & Proportional Taxes?
What Is the Difference Between Progressive, Regressive & Proportional Taxes?
Tip
Progressive Tax Systems
Understanding Regressive Taxes
Proportional Tax Systems
Multiple Category Taxes

Content: The income tax system allows individuals and businesses to use a variety of exclusions and deductions to reduce taxable income. Understanding Regressive Taxes
A regressive tax system means low-income people pay a larger proportion of income in taxes than do wealthy people. Basically, a regressive tax system shifts the tax burden toward lower-income taxpayers. Sales taxes are regressive, because lower-income families tend to spend a larger proportion of their income on taxable goods than do wealthy families. Real estate property taxes also tend to be regressive because they are based on the appraised value of property rather than on the taxpayer's ability to pay, and because lower-income taxpayers tend to have more of their assets in taxable real estate than wealthy taxpayers. Proportional Tax Systems
Proportional tax systems, also known as flat-tax systems, apply the same tax rate to all taxpayers. Examples include flat-rate income taxes, gross receipts taxes, occupation taxes, amusement admission taxes and per-capita taxes. In theory, this system should take an equal proportion of everyone's income because everybody is paying the same rate. In practice, however, the proportional system doesn't translate to equal sacrifice. That's because the marginal worth to you of each dollar is greater when you have fewer total dollars.