What is the difference between a...?

Question

progressive tax and regressive tax? can someone give examples of both?

Answer 1

Progressive tax:  Rates rise as income rises.  The Federal income tax is an excellent example.  The result is that  a lower income individual pays a smaller portion of his total income in taxes.

Regressive tax:  Rates are flat or (worse) drop as income rises.  Sales taxes are a good example.  A lower income individual pays a much larger portion of their income in tax since every penny they earn goes towards (mostly) taxable purchases.  A wealthier taxpayer doesn't spend all of her income -- she tends to amass wealth -- so therefore pays less tax as a function of income.