Definition of Regressive tax:
Taxation that takes a larger percentage of a lower-income and a smaller percentage of a higher income. For example, a tax on the basic necessities (which form a larger percentage of the expenditure of the lower income population) is a regressive tax. See also progressive tax.
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. .
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.
How to use Regressive tax in a sentence?
- I was not aware that the company I had been hired by had imposed a regressive tax and, therefore, the tax rate would decrease over time.
- Some countries use a regressive tax that favors the rich people and ends up costing the poor people more money.
- Some times there is a regressive tax that will take more from the poorer people than the richer people but I am not sure why.
Meaning of Regressive tax & Regressive tax Definition