Progressive tax it is when all tax payers pay the same amount of tax and regressive tax is when the poor people pay more tax than rich people
What Is The Difference Between Progressive And Regressive Taxes?
Benefit taxes are a declining fraction of government revenues. Today, advanced countries rely heavily on progressive income taxes. With progressive taxes, a family with $50,000 of income is taxed more than one with $20,000 of income. Not only does the higher income family pay a larger income tax, but also it in fact pays a higher fraction of its income.
This progressive tax is in contrast to strictly proportional tax, in which all taxpayers pay exactly the same proportion of income. A regressive tax takes a larger fraction of income in taxes from poor families than it does from rich families.
A tax is called proportional, progressive, or regressive depending on whether it takes from high-income people the same fraction of income, a larger fraction of income, or a smaller fraction of income than it takes from lower income people.
There are also different types of taxes. Some examples of those taxes are: A personal income tax that is graduated to take more and more out of each dollar of income is progressive. A cigarette tax is regressive tax because spending on cigarettes takes a larger fraction of income from low-income groups.
This progressive tax is in contrast to strictly proportional tax, in which all taxpayers pay exactly the same proportion of income. A regressive tax takes a larger fraction of income in taxes from poor families than it does from rich families.
A tax is called proportional, progressive, or regressive depending on whether it takes from high-income people the same fraction of income, a larger fraction of income, or a smaller fraction of income than it takes from lower income people.
There are also different types of taxes. Some examples of those taxes are: A personal income tax that is graduated to take more and more out of each dollar of income is progressive. A cigarette tax is regressive tax because spending on cigarettes takes a larger fraction of income from low-income groups.