Regressive tax
This is an old revision of this page, as edited by FredCorps (talk | contribs) at 14:09, April 10, 2009. It may differ significantly from current revision.
A regressive tax is when everyone is taxed a fixed dollar amount, or fixed percentage such as sales tax. Essentially, a regressive tax causes those earning lower incomes to pay a greater percentage of their income. This acts as an incentive to force those earning lower incomes to work to earn higher incomes, thus reducing their effective tax rate.