Custom Academic Paper: A Regressive Tax

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Custom Academic Paper: A Regressive Tax

A Regressive Tax

A regressive tax refers to a tax policy that levies more on the low-income earners than on the wealthy or high-income earners. On the basis of this policy, the low-income earner pays more as a percentage of their gross income budget than the wealthy.

For instance, an individual who earns $10 and is expected to pay $1 tax on a packet of cooking flour pay 10%. On the other hand, a person who earns $40 pays 2.5% tax on the same commodity. This is believed to be unfair and biased because it makes these commodities unaffordable for the low-income earners. In practical situations during slow economic growth, this system is at times favorable for a state.

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