Difference between revisions of "Regressive tax"
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| − | A '''regressive tax''' is a form of taxation where an individual's effective [[tax rate]] ''decreases'' as their amount of income ''increases''. Essentially, a regressive tax causes those earning lower incomes to pay a greater percentage of their income in taxes. In the United States, [[sales tax]]es and [[payroll taxes]] ([[Social Security]] and [[Medicare]]) are the two most common examples of regressive taxes | + | A '''regressive tax''' is a form of taxation where an individual's effective [[tax rate]] ''decreases'' as their amount of income ''increases''. Essentially, a regressive tax causes those earning lower incomes to pay a greater percentage of their income in taxes. In the United States, [[sales tax]]es and [[payroll taxes]] ([[Social Security]] and [[Medicare]]) are the two most common examples of regressive taxes. |
==See Also== | ==See Also== | ||
Revision as of 13:46, March 18, 2013
A regressive tax is a form of taxation where an individual's effective tax rate decreases as their amount of income increases. Essentially, a regressive tax causes those earning lower incomes to pay a greater percentage of their income in taxes. In the United States, sales taxes and payroll taxes (Social Security and Medicare) are the two most common examples of regressive taxes.