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Economics 101: Regressive Tax | SterlingTerrell.net

Economics 101: Regressive Tax


What is defined as a regressive tax?

A Regressive Tax is a tax where the overall tax rate decreases as the taxable amount increases.

The example that everyone uses for this is social security taxes.

The tax is paid on income below a certain point.

Therefore, the more you earn, the less portion of your income goes to the tax.

This is different from a proportional tax.