Regressive Tax
Definition
A tax whose average rate falls as income rises — proportionally heavier on the poor. Sales taxes on necessities are typically regressive.
Example
A flat sales tax hits low-income households harder as a share of income.
A tax whose average rate falls as income rises — proportionally heavier on the poor. Sales taxes on necessities are typically regressive.
A flat sales tax hits low-income households harder as a share of income.