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Which Best Describes a Regressive Tax? And Progressive Vs Regressive Taxes.

A regressive tax is one that levies greater rates on those with higher incomes or wealth. Individuals who earn more are taxed at a lower percentage than those who earn less.

Which Best Describes a Regressive Tax?

Increases in income or wealth lead to greater tax rates, which is what is meant by the term “regressive tax.” Individuals who climb up the income ladder are subjected to a lower tax rate.

Regressive taxes include things like income and sales taxes. There are several examples of taxes that don’t take into account how much money a person produces. Or what he owns, such as the flat-rate income tax or retail sales tax.


This system of taxation generally benefits the higher sections of the society having higher incomes as they need to pay tax at lesser rates. On the other hand, people with lesser incomes are burdened with higher rate of taxation.

Which of the Following Best Represents a Tax That Is Both Progressive and Regressive?

The term “regressive tax” refers to a type of taxation in which higher rates are applied as income or wealth levels rise.

Which Best Describes a Regressive Tax?

In General, What Are the Different Forms of Regressive Taxes?

Flat rate and value-added taxes are the two most common forms of regressive taxes to be found. A flat-rate tax is a straightforward tax in which the same percentage is applied to the whole amount of money being taxed, regardless of the individual’s ability to pay the taxes.

Customers’ purchases are exempt from Value Added Tax (VAT), and the percentage rate charged remains consistent throughout the production chain. A value-added tax (sometimes known as a sales tax) is levied on transactions when they are completed, on top of any raw materials that have already been paid.

How Do Progressive Taxes Benefit Society?

As a result of encouraging social mobility and reducing inequality amongst citizens, progressive taxation helps society. By ensuring that everyone pays their fair share of taxes, it helps to minimize economic inequality and encourage social mobility in the United States. The more an individual’s income, the greater the percentage of his or her income that will be taxed.

Why Is Regressive Tax Bad?

regressive tax is harmful because it makes no distinction between people with higher and lower incomes. 
progressive tax, on the other hand, raises taxes on wealthy earnings in order to pay for programmes that will assist those who are less fortunate, ultimately benefiting all residents.

What Does the Term ‘Regressive Tax’ Mean?

regressive tax is one that takes bigger proportion of revenue from poorer earnings than it does from higher earners, as defined by the United Nations. 
Which Best Describes a Regressive Tax?
For example, state and local taxes account for an average of 17 percent of the income of the bottom 20 percent of the income distribution.
Regressive taxes include income taxes and sales taxes, to name a few examples. For example, a flat-rate income tax or retail sales tax does not take into account how much money someone produces or what he possesses, resulting in higher earners paying a proportionately greater share of the tax burden.

User Fees

The imposition of user fees by the government is yet another kind of regressive taxation. These fees include entry to government-sponsored museums and state parks. The purchase of driver’s licences and identity cards, as well as tolls for highways and bridges, among other things.

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Example: If two families visit to the Grand Canyon National Park and pay a $30 entry charge, the family with a higher income pays a smaller percentage of its income to enter the park, whereas a larger percentage of its income is paid by the family with a lower-income. Despite the fact that the charge remains the same. It is a more severe burden on the family with lesser income, making it a regressive tax once more.

Property Taxes

As previously stated, property taxes are inherently regressive in nature because, if two persons within the same tax jurisdiction live in properties with the same values, they both pay the same amount in property tax, regardless of their respective incomes. In practise, however, they are not totally regressive because they are dependent on the value of the property being assessed.

Which Best Describes a Regressive Tax?

In general, it is assumed that lower-income earners reside in less costly properties, resulting in a partial indexing of property taxes to income for these individuals.

Read More:- Which of These Best Describes Income Tax? Its Type and How Is It Works?

Flat Taxes

The term “flat tax,” which is frequently heard in discussions concerning income tax, refers to a taxation system. In which the government taxes all income at the same rate, regardless of the amount earned. There are no particular deductions or credits available under a flat tax system. Instead, each individual pays a fixed proportion of their total income, resulting in a regressive tax. Consequently, lower-income persons pay practically the same rate as higher-income earners rather than the lower rate of higher-income workers.

Which Best Describes a Regressive Tax?

What Is the Difference Between Progressive and Regressive Taxes?

Progressive taxes are those in which the average tax rate rises as a person’s income rises over time. Taxes that are regressive are those whose average tax rates fall as a person’s income increases. The most significant distinction between progressive and regressive taxes is that, under progressive taxation. The tax rate increases as an individual’s income grows.

Read More:- What Is a Progressive Tax? What Are Its Effective Rates?

Meanwhile, under regressive taxation, it reduces as income grows, which is counterproductive. The marginal tax rate is a pattern of tax rates that is dependent on the distribution of income and is defined as follows:

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