What Is Regressive Tax?

What Is Regressive Tax?

1. What Is Regressive Tax? By: Robin Taliaferro

2. What Is Regressive Tax? California finance and tax specialist Robin Taliaferro has vast industry experience that spans almost three decades. An MBA corporate finance graduate from Babson Institute, he is the founder and CEO of Corporate Officer Tax Strategies, LLC. In the course of his career, Robin Taliaferro has worked in senior positions for numerous Silicon Valley companies focusing on tax, risk, and liquidity. He has also attended over 30 tax seminars across California, covering a wide spectrum of tax topics such as regressive tax.

3. What Is Regressive Tax? Regressive tax is a regime where those with low incomes pay a larger share of income in taxes compared to those earning higher incomes. Tax on basic necessities such as food is considered regressive, as people in the lower income bracket are forced to spend a bigger portion of their incomes to acquire basic commodities, which translates to higher taxes. Unfortunately, regressive tax severely affects individuals with lower incomes compared to high earners, since taxes are applied uniformly, irrespective of the financial status of a taxpayer.

4. What Is Regressive Tax? While it may be fair in some cases to tax everyone at the same rate, regressive tax is considered by some to be unjust. Even though the U.S. has a progressive tax system where high income earners pay a larger percentage of income taxes compared to their lower income counterparts, there are certain levies, such as state sales taxes, user fees, and some property taxes, that are considered to be regressive taxes.