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Regressive Tax

AnalyticsTrade Team
AnalyticsTrade Team Last updated on 26 Apr 2023

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Regressive Tax

A regressive tax is a tax that takes a larger percentage of income from low-income earners than from high-income earners. It is opposite of a progressive tax, which takes a larger percentage of income from high-income earners than from low-income earners. Regressive taxes are often used to fund government programs and services, such as public education and infrastructure.

History of Regressive Tax

Regressive taxes have been used since ancient times, with the earliest known example being the Roman Empireโ€™s poll tax. In the United States, regressive taxes have been used since the late 19th century, when the federal government began to impose taxes on goods and services. In the early 20th century, the federal government began to impose income taxes, which are generally progressive in nature. However, some states have adopted regressive taxes, such as sales taxes, which are imposed on all goods and services regardless of income level.

Comparison of Regressive and Progressive Taxes

Tax Type Low-Income Earners High-Income Earners
Regressive Higher Percentage Lower Percentage
Progressive Lower Percentage Higher Percentage

Summary

Regressive taxes are taxes that take a larger percentage of income from low-income earners than from high-income earners. They have been used since ancient times and are still used today in some states. For more information on regressive taxes, visit the Internal Revenue Service website or the Tax Foundation website.

See Also

  • Progressive Tax
  • Flat Tax
  • Income Tax
  • Sales Tax
  • Property Tax
  • Capital Gains Tax
  • Estate Tax
  • Excise Tax
  • Tariff
  • Value-Added Tax (VAT)

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