What You Should Know About Regressive Taxes

A regressive tax is one that is assessed at the same rate to everyone, regardless of their income. They are also sometimes called flat taxes.

Some examples of regressive taxes include:

-Sales tax -Gas taxes -Payroll taxes -"Sin" taxes, such as alcohol or tobacco -Income taxes in some states or municipalities

What's the difference between regressive tax and progressive tax?

Progressive taxes are proportionally higher for those with higher incomes. They are proportionally lower for those with lower incomes.

The federal income tax in the United States is a progressive tax. The higher your income, the higher percentage you pay on each additional dollar of income.

Remember that a higher tax bracket doesn't mean that you pay that higher percentage on every dollar of income.

At first glance, it may seem that a regressive tax would be more "fair," since everyone gets taxed the same dollar amount or the same percentage. But a regressive tax places a higher burden on those with lower incomes.