Sales tax would be an example of a regressive tax because people with higher incomes will spend more on things such as food and clothing, causing them to pay more in sales tax than someone with a lower income who will spend less on clothing and food.
What is regressive tax?
A regressive tax is a tax applied uniformly, taking a larger percentage of income from low-income earners than from high-income earners. It is in opposition to a progressive tax, which takes a larger percentage from high-income earners.
A regressive tax affects people with low incomes more severely than people with high incomes because it is applied uniformly to all situations, regardless of the taxpayer.
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