Regressive tax
This is an old revision of this page, as edited by TK (talk | contribs) at 12:10, July 1, 2010. It may differ significantly from current revision.
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.