Regressive Tax
A regressive tax is a type of tax that takes a larger percentage of income from low-income earners than from high-income earners. This means that as a person's income increases, the proportion of their income paid in taxes decreases. Common examples of regressive taxes include sales taxes and excise taxes, which apply the same rate regardless of income level.
Because regressive taxes can disproportionately affect those with lower incomes, they are often criticized for increasing economic inequality. Policymakers may consider the impact of such taxes on different income groups when designing tax systems to ensure fairness and equity in taxation.