What is meant by a regressive tax?
A regressive tax is a tax whose rate in terms of percentage reduces as the level of income increase. Here the low income earners pay a higher proportion of their income in form of taxes then the rich.
Or
A regressive tax is one where the average tax burden decreases with income.
Advantages of a regressive tax
Regressive tax helps to reduce the demand for goods like tobacco and alcohol products.
CATEGORIES Economics
TAGS Dr. Bbosa Science