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Regressive Tax at a Glance

Regressive Tax


Regressive taxes are those which are applied as a percentage of the price of an item, or as a percentage of income. Progressive taxes are those which are applied fairly to incomes of every amount, so that those that make a higher salary, pay a larger amount in taxes, but as an equal percentage of their salary.

Sales taxes are a regressive tax, as they are applied as a percentage of the cost if an item.The sales tax applies to all individuals equally, regardless of other circumstances, such as the amount of the individuals salary.

Regressive taxes include flat taxes and excise taxes, which are paid on items. For example, the excise tax on gasoline is a regressive tax, as it taxes the amount of gasoline purchase by volume, rather than the salary of the individual buying the item.

The only real progressive tax is generally considered to be income tax, but not in the manner it is currently imposed. There have many that have lobbied for an elimination of the regressive taxes, such as sales taxes, to be replaced with a fair progressive tax to be applied to income.

Replacing regressive taxes with a progressive tax would fairly distribute the tax burden, according to the income of an individual. The wealthy would pay a higher tax on their income, as a percentage, to distribute the tax burden according to wealth.

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