ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Sales taxes and excises (except those on luxuries) tend to be regressive, because the share of personal income consumed or spent on a specific good declines as the level of personal income rises. Poll taxes (also known as head taxes), levied as a fixed amount per capita, obviously are regressive.

Detailed explanation-2: -progressive tax-A tax that takes a larger percentage of income from high-income groups than from low-income groups.

Detailed explanation-3: -Sales and excise taxes are the most regressive element in most state and local tax systems. Sales taxes inevitably take a larger share of income from low-and middle-income families than from rich families because sales taxes are levied at a flat rate and spending as a share of income falls as income rises.

Detailed explanation-4: -What is Regressive Tax. Definition: Under this system of taxation, the tax rate diminishes as the taxable amount increases. In other words, there is an inverse relationship between the tax rate and taxable income. The rate of taxation decreases as the income of taxpayers increases.

Detailed explanation-5: -Key Takeaways Progressive tax refers to the tax arrangement wherein the government imposes taxes with respect to the income levels of individuals. As a result, the higher-income group pays more tax than the lower-income group.