Tax levied at a rate that decreases as its base increases.
Regressivity is considered undesirable because poorer people pay
a greater percentage of their income in tax than wealthier
people. Consumption taxes and sales taxes are usually considered
regressive because of their set rate structures. Tobacco,
gasoline, and liquor sales taxes, all major sources of tax
revenue, are the most regressive taxes. In an effort to limit
regressivity, a number of U.S. states have exempted medicine and
grocery items from sales tax. Although the property tax is
sometimes judged regressive because poorer people spend a larger
percentage of their income on housing than wealthier people,
property taxes are nonetheless effective in redistributing
wealth from higher to lower income groups. Seealso progressive
tax. Learn more about regressive tax with a free trial on
Britannica.com. The term is frequently applied in reference to
fixed taxes, where every person has to pay the same amount of
money. The regressivity of a particular ta