Regressive Taxation

Regressive taxation occurs when the tax rate decreases as income increases, meaning that lower-income individuals pay a larger percentage of their income in taxes compared to wealthier individuals. This often happens with flat taxes, sales taxes, or certain fees that everyone pays equally, regardless of income level. As a result, those with less financial means may feel a heavier burden, while wealthier individuals pay proportionally less. This system can lead to increased income inequality, as it disproportionately affects those who are struggling to make ends meet.