REGRESSIVE TAX Meaning and
Definition
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A regressive tax is a type of tax system in which the tax rate decreases as the taxpayer's income increases. In other words, as individuals earn more income, their tax burden as a proportion of their income decreases. This type of tax structure places a greater burden on lower-income individuals and households compared to those with higher incomes.
Under a regressive tax system, the tax rate is typically set at a fixed rate or a diminishing rate as income rises. This means that low-income individuals or families are required to allocate a larger portion of their income to pay taxes, leaving them with a smaller disposable income for other necessities such as housing, education, or healthcare. On the other hand, individuals with higher incomes, who can afford to pay a larger share, experience a relatively smaller impact on their overall income.
Regressive taxes are often criticized for exacerbating income inequality and for being less equitable compared to progressive taxes, where the tax rate increases as income increases. As a result, regressive tax systems can sometimes lead to a disproportionate burden placed on lower-income individuals, contributing to a widening wealth gap. However, regressive taxes could also be designed to target specific goods or services, such as consumption taxes on luxury items, as a means of regulating consumption patterns or addressing externalities.
Common Misspellings for REGRESSIVE TAX
- eegressive tax
- degressive tax
- fegressive tax
- tegressive tax
- 5egressive tax
- 4egressive tax
- rwgressive tax
- rsgressive tax
- rdgressive tax
- rrgressive tax
- r4gressive tax
- r3gressive tax
- refressive tax
- revressive tax
- rebressive tax
- rehressive tax
- reyressive tax
- retressive tax
- regeessive tax
- regdessive tax
Etymology of REGRESSIVE TAX
The word "regressive" comes from the Latin word "regressus", which is the past participle of the verb "regredi", meaning "to go back" or "to return". In English, the term "regressive" is used to describe something that moves backward or goes against progress. When referring to taxes, a "regressive tax" is one that takes a larger percentage of income from individuals with lower incomes and a smaller percentage from individuals with higher incomes. This term is based on the idea that the tax rate "regresses" or decreases as income increases.
Similar spelling words for REGRESSIVE TAX
