Regressive tax

A regressive tax imposes a greater burden on lower-income people than on higher-income people. An example of a regressive sales tax is any tax on sales, such as a 7% state sales tax. A sales tax is regressive, since it is a flat tax that is the same, no matter what the income of a purchaser may be. Lower-income people spend a higher proportion of their income on goods and services than higher-income people, so a sales tax is regressive from their perspective. Other regressive taxes are any type of use fee (such as a road toll) and property taxes. Regressive taxes are generally avoided in favor of progressive taxes, where the tax increases with the income of the taxpayer. Progressive taxes reduce the burden on the lowest-income people, who can least afford to pay.