Difference between revisions of "Regressive tax"
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A '''regressive tax''' is one in which everyone is assessed a fixed dollar amount or a fixed percentage, such as a 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]]. | A '''regressive tax''' is one in which everyone is assessed a fixed dollar amount or a fixed percentage, such as a 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]]. | ||
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| + | ==See Also== | ||
| + | *[[Flat tax]] | ||
| + | *[[Progressive tax]] | ||
[[Category:Economics]] | [[Category:Economics]] | ||
Revision as of 19:20, March 10, 2011
A regressive tax is one in which everyone is assessed a fixed dollar amount or a fixed percentage, such as a 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.