What Is Regressive Tax?


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Muddassar Memon Profile
Muddassar Memon answered
A regressive tax basically is a tax forced so that the tax rate reduces as the amount to which the rate is applied augments. The expression "regressive tax" can be applied to any form of tax.

It is often levied in reference to predetermined taxes, where every individual has to pay the similar amount of money, such as a poll tax. On the other hand the expression regressive refer to the way the rate advances from high to low. Regressive taxes decrease the tax incidence of people with higher earnings, as they transfer the incidence disproportionately to those who have lesser earnings.

The regressively of a particular tax frequently depends on the inclination of the tax payers to engage in the taxed activity comparative to their earnings.

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