Difference between revisions of "Regressive tax"
Jump to navigation
Jump to search
m (uncaps) |
|||
| Line 1: | Line 1: | ||
| − | A '''regressive tax''' is when everyone is taxed a fixed dollar amount. Essentially, a regressive tax causes those earning lower incomes to pay a greater percentage of their income. This acts as an incentive to force those earning lower incomes to work to earn higher incomes, thus reducing their effective [[tax rate]]. | + | A '''regressive tax''' is when everyone is taxed a fixed dollar amount, or fixed percentage such as sales tax. Essentially, a regressive tax causes those earning lower incomes to pay a greater percentage of their income. This acts as an incentive to force those earning lower incomes to work to earn higher incomes, thus reducing their effective [[tax rate]]. |
[[Category:Economics]] | [[Category:Economics]] | ||
Revision as of 14:09, April 10, 2009
A regressive tax is when everyone is taxed a fixed dollar amount, or fixed percentage such as sales tax. Essentially, a regressive tax causes those earning lower incomes to pay a greater percentage of their income. This acts as an incentive to force those earning lower incomes to work to earn higher incomes, thus reducing their effective tax rate.