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Regressive tax

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Three Types of Tax Systems

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What is REGRESSIVE TAX? What does REGRESSIVE TAX mean? REGRESSIVE TAX explanation

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Proportional and regressive taxes

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Regressive tax meaning

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Regressive, Proportional, and Progressive Taxes

A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases. "Regressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from high to low, so that the average tax rate exceeds the marginal tax rate. In terms of individual income and wealth, a regressive tax imposes a greater burden on the poor than on the rich: there is an inverse relationship between the tax rate and the taxpayer's ability to pay, as measured by assets, consumption, or income. These taxes tend to reduce the tax burden of the people with a higher ability to pay, as they shift the relative burden increasingly to those with a lower ability to pay.